Tax Talk: Omitting additional income in ITR may get you tax notice

financialexpress.com:

By Neeraj Agarwala

Recent reports of the income tax department issuing notices to salaried employees have sparked concerns in all individual taxpayers’ minds. These notices issued for FY 2021-22, stem from digital parameters established by the tax department to uncover questionable claims of deductions and exemptions. So let’s see what are the factors that might increase your chances of receiving a tax notice.

Employers are tasked with the responsibility for examining eligible relevant documents to claim deductions like LTA, HRA as well as exemptions under Sections 80C and 80D. However, when employees fail to furnish these documents to their employer but still claim the deductions in their tax returns, the tax department is inclined to issue notices in such cases. HRA & house loan deductions

At times, individuals make incorrect claims of both House Rent Allowance (HRA) and house loan deductions in their tax returns. While it’s permissible to claim HRA and house loan deductions concurrently under a few specific conditions, such as owning a house in a different city from your workplace; claiming both deductions can trigger a notice by the tax department. The purpose of this notice is to grant the tax department an opportunity to examine these cases.

For taxpayers claiming HRA deductions, providing the PAN, name, and address of the landlord is obligatory if annual rent payment is over 1,00,000. However, there has been misuse of this provision by certain individuals who falsely claim HRA deductions under1,00,000 to evade PAN submission. To counter this, the tax department is more prone to send notices to those claiming HRA deductions without furnishing the landlord’s PAN.

Any additional income derived by a taxpayer is