The Income Tax Department is keeping a very close watch on low fund withdrawals by some individuals, an Economic Times report said on Friday.
The report stated that queries have been sent to some taxpayers regarding their monthly spending. It added that this step has been taken by the I-T department as part of its crackdown on tax evasion.
According to the report, I-T officials are using data analytics to analyse bank account withdrawals. Small expenses such as groceries, haircuts, and shopping for clothes and shoes are also under scrutiny. Notices have been sent to individuals seeking a detailed breakdown of their monthly spending on groceries and other expenses, the ET report said.
However, tax officials told ET that notices have only been sent to high-net-worth individuals who have spent significantly less than their reported incomes. Tax authorities suspect the possible involvement of cash in such cases. The key issue is that low cash withdrawals do not align with the individuals’ lifestyles.
Additionally, the I-T department has asked the individuals in question to provide details about their family members, their annual incomes, PAN numbers, and other relevant information. The ET report also mentioned that last November, the I-T department had launched a similar drive focusing on individuals who had not declared their foreign income.
