Income Tax Department Monitors All Expenditures, From Groceries to Haircuts, Issues Notices
Income Tax Department Monitors All Expenditures, From Groceries to Haircuts, Issues Notices
The Income Tax (I-T) department has intensified its scrutiny of individual expenditures to curb tax evasion. Notices are being issued to individuals who report high incomes but withdraw minimal amounts from their bank accounts, raising suspicions of undisclosed earnings or significant cash transactions.
Detailed Expense Breakdown Sought
The I-T department is asking individuals to provide a breakdown of their monthly household expenses, including spending on groceries, gas, education, cosmetics, dining, and personal grooming like haircuts. These notices are targeted at those whose financial activity appears inconsistent with their lifestyle.
Family and Income Details Required
Along with expenditure details, individuals must submit information about their family members, including profiles, PAN numbers, and annual income. Failure to respond may lead the department to assume the individual has withdrawn ₹1 crore in cash over the year.
Focus on High Net-Worth Individuals
The department is primarily targeting High Net-Worth Individuals (HNIs) who maintain a luxurious lifestyle but report low expenses. This move follows a similar campaign in November 2023, where the department investigated undeclared foreign income based on information from global tax authorities.
Government’s Data-Driven Approach
Using advanced data analysis, the I-T department aims to strengthen its tax monitoring efforts further. The initiative highlights the growing importance of maintaining transparent financial records and declaring all sources of income.
