Income Tax notice alert! Senior executives with over Rs 50 lakh salaries under radar for ‘underreporting income’, misusing exemptions – The Times of India

The Income Tax Division has flagged circumstances involving non-disclosure of abroad belongings and overseas earnings. (AI picture)

Income Tax Notice alert! The Income Tax Division is cracking down on alleged misreporting of earnings by senior executives throughout multinational firms and startups. A number of such executives incomes over Rs 50 lakh have obtained tax notices from the I-T Division.The tax division has alleged that in all these circumstances the earnings has both been underreported, misreported, or false exemptions have been claimed to cut back tax outgo.

Why Income Tax Notices Are Being Despatched

The Income Tax Division has flagged circumstances involving non-disclosure of abroad belongings and overseas earnings, understatement of inventory-primarily based compensation, and inflated claims of advantages reminiscent of lodging and journey allowances geared toward reducing taxable earnings.In response to officers quoted in an ET report, the Income Tax Division authorities have issued notices to those people — together with chief executives and managing administrators at multinational firms — asking them to right discrepancies of their filings earlier than any motion is taken.

Tax notices

Executives from industries together with, data know-how, quick-transferring client items, hospitality, engineering and development, and cars have obtained such notices. Officers cited within the report stated that a number of founders and senior leaders from startups have additionally attracted the tax division’s scrutiny.In lots of situations, the taxpayers are alleged to have sought tax reduction by reporting bogus donations to spiritual our bodies, charitable organisations, or academic establishments.We’re analyzing greater than two dozen circumstances involving investments in excessive-worth properties, over 50 situations the place substantial secondary earnings was obtained from overseas shoppers in cryptocurrencies, and circumstances that includes important contributions to political events which can be neither formally recognised nor taking part in elections, a senior official was quoted as saying.These irregularities got here to mild following nearer scrutiny of earnings tax returns filed by excessive earners through the ongoing evaluation interval. Under its ‘Non-intrusive Utilization of Information to Information and Allow (Nudge)’ initiative, the division has prompted a number of executives to submit revised returns to deal with inconsistencies.An official famous that some taxpayers assumed abroad acquisitions and holdings would escape detection. Nonetheless, with the federal government getting necessary monetary data by way of automated information-sharing preparations and monitoring linked to the Everlasting Account Quantity (PAN), concealing such overseas dealings has turn out to be far more difficult.Among the many undeclared belongings which were recognized are properties registered within the names of spouses and minor kids, overseas fairness investments, cryptocurrency-primarily based earnings, and funds maintained in abroad financial institution accounts.The evaluation additionally revealed a placing pattern: many taxpayers represented by the identical chartered accountants had been contributing to an identical establishments. The official added that separate proceedings are being initiated towards these chartered accountants.This enforcement drive is a component of the federal government’s wider effort to strengthen compliance by way of information-centric oversight. In recent times, authorities have more and more relied on synthetic intelligence-powered analytics to detect mismatches between reported earnings, tax deducted at supply data, and knowledge obtained from third-occasion monetary sources.Thus far within the present monetary yr, over 2.1 million taxpayers have revised their returns for evaluation years 2021-22 by way of 2024-25, leading to extra tax funds exceeding Rs 2,500 crore. Moreover, greater than 1.5 million returns have already been up to date for the continuing evaluation yr.Within the 2026-27 Finances, the Centre launched a one-time six-month compliance window permitting people to reveal overseas belongings. The measure is meant to supply reduction to taxpayers, together with professionals with unreported worker inventory possibility holdings and college students who continued to carry funds in abroad accounts.