Non-Filing of Income Tax Returns: Income Tax Dept to issue Notice to 1.52 Cr Individuals under Taxable Slab, Salaried Persons with Deducted TDS

In the fiscal year 2022-23, there were approximately 8.9 Crore taxpayers, but only 7.4 Crore returns were filed, including revised returns
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The income tax department is preparing to take action against individuals and entities who are required to file tax returns but have failed to do so. Officials have identified 15.2 million such individuals who either earned income or had tax deducted at source ( TDS ) but did not meet their tax filing obligations.

The Central Board of Direct Taxes ( CBDT ) has instructed its field units to engage with these individuals starting April 15. A senior official, speaking anonymously, highlighted the issue, noting that many individuals and entities neglected to file returns despite having taxes deducted at the source, as per reports.

In the fiscal year 2022-23, there were approximately 89 million taxpayers, but only 74 million returns were filed, including revised returns. This suggests that about 19.7 million individuals did not file income tax returns despite incurring TDS.

Among the non-filers, 19.3 million were individuals, 28,000 were Hindu undivided families, around 121,000 were firms, and the rest fell into various other categories. In some cases, significant bank transactions associated with permanent account numbers necessitated tax return filings.

Officials have been tasked with reaching out to these individuals with relevant data and information, explaining the importance of filing returns. The CBDT has information about 8,000-9,000 potential taxpayers who have received tax notices due to clear records of high-value purchases or substantial cash deposits.

For deliberate non-compliance, penalties will be imposed. However, taxpayers with valid reasons for sudden income increases may need to provide an explanation or file a return. The department is using its vast data resources to identify non-filers and discrepancies.

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