Recently, the Income Tax Department has been sending notices to taxpayers who requested a larger refund in prior fiscal years. The Income Tax Department is issuing notices pursuant to Section 133(6) of the 1961 Income Tax Act.
This document covers
Mr Paul was salaried employee and he was earning a salary of Rs 15 lakhs per annum and his TDS deducted by employer for FY 2021-22 was Rs 2.5 lakhs. He has filed his income tax return for AY 2022-23 and claimed a refund of Rs 2 lakhs after claiming various deductions and exemptions.
As Mr Paul has claimed more refund (more than 1 lakh), there is a chance that Mr Paul might get notice u/s 133(6) of Income Tax act.
Mr Shishpal is an Indian Citizen and he left to USA in 2017 for employment purpose. He has filed his income tax returns in India till 2017 but from 2018 he never filed the income tax returns in India assuming he is an NRI and not required to file tax returns in India. But he used to send the amount from foreign banks to Indian banks and he have financial interest outside India.
In this case, there is a high chance that Mr Shishpal will get notice u/s 133(6) asking him to submit passport, Foreign bank statements, source of income etc.
Therefore, EZTax advises NRIs to submit income tax returns in India even if they have no taxable income there.
The penalty for failing to comply with notices under section 133(6) of the income tax act is $500 per day under section 272A(2). The utmost penalty for each failure or default is Rs 10,000. In addition, interest and other penalties would be assessed for noncompliance.