- Date : 25/01/2019
- Read: 4 mins
Data analysis has revealed that several taxpayers with high-value transactions in the financial year 2017-18 has not yet filed their return, the finance ministry has now given them a 21 days ultimatum.
Based on the information available in the Income Tax (IT) Department database, data analysis was carried out to identify non-filers of the IT return. The information includes Statement of Financial Transactions (SFT), TDS, Tax Collection at Source (TCS) & foreign remittances etc. The analysis identified several non-filers who had carried out high-value transactions in the financial year 2017-18.
From these findings, the Ministry of Finance has requested the non-filers, through a tweet, to assess their tax liability for the year and file their returns. They can also submit an online response, in lieu of the return, providing an explanation for the non-filing. If the explanation is found satisfactory, the matter will be closed online. However, if neither return nor response is received from the non-filer within 21 days, proceedings under the Income Tax Act will be initiated, the Ministry added in a follow-up tweet. A similar exercise last year yielded a tax revenue of over 26 thousand crores through filings done by over 1.72 crore taxpayers.
The Central Board of Direct Taxes (CBDT) uses the Non-filers Monitoring System (NMS) to identify and monitor taxpayers who have entered into high-value transactions and have a potential tax liability. The department has tried to keep the compliance cost low in these cases by keeping the entire process online, including making case information available to the taxpayer, e-verification, online response etc.
Related: What makes tax-saving exercise an important financial planning tool?
For whom is filing tax return mandatory?
Individuals below the age of 80 and Hindu Undivided Families having a refund claim or having a total income of more than five lakhs during the previous year are required to file their return. For corporate taxpayers e-filing with digital signature is mandatory. Filing is also compulsory for assessee’s who are required to audit their books of accounts, taxpayers claiming relief under various sections of the Income Tax Act as well as those who are required to furnish a report of audit under different subsections of section 10(23), 80, 92, 115 etc.
Related: Income Tax Returns: Who should file them and when?
How to respond online to this request?
If you have not yet filed your ITR but have a tax liability, it is the right time to log into the Income Tax’s e-filing website and file the return. You can access information related to your case from the Compliance Portal. This portal can be browsed through the e-filing website, i.e. www.incometaxindiaefiling.gov.in
You can file your response electronically on the Compliance Portal and retain the hard copy for documentation purpose. The “Resources” tab in the Compliance Portal contains User Guide and FAQs, should you need it.
What is the Non-Filers Monitoring System (NMS)?
NMS prioritises action against non-filers of IT return who have potential tax liabilities. It identifies tax evaders through data mining and analytics. The tax department issues non-compliance notices under the NMS based on the findings of the NMS. In simple terms, it is a system that is equipped to do high-level analytics and mining on the data available through its various sources.
Related: Top 6 Most Common Mistakes to avoid when filing IT returns
What are the sources of the data analysis?
The NMS based data analysis uses various sources like the Centralised Information Branch, TDS and TCS statements, foreign remittances, Statement of Financial Transactions (SFT) etc.
SFT captures sales, purchases and exchanges of goods, property, rights to property etc.; transactions under work contracts; any investments made or deposits accepted. Basically, Section 285BA defines the guidelines around SFT.
TDS and TCS are available with the department as the deducted amount is deposited with the department and the information is retained by them.
If you want to file your returns online, here's a video that will help you do so in the simplest manner.
Based on the information available in the Income Tax (IT) Department database, data analysis was carried out to identify non-filers of the IT return. The information includes Statement of Financial Transactions (SFT), TDS, Tax Collection at Source (TCS) & foreign remittances etc. The analysis identified several non-filers who had carried out high-value transactions in the financial year 2017-18.
From these findings, the Ministry of Finance has requested the non-filers, through a tweet, to assess their tax liability for the year and file their returns. They can also submit an online response, in lieu of the return, providing an explanation for the non-filing. If the explanation is found satisfactory, the matter will be closed online. However, if neither return nor response is received from the non-filer within 21 days, proceedings under the Income Tax Act will be initiated, the Ministry added in a follow-up tweet. A similar exercise last year yielded a tax revenue of over 26 thousand crores through filings done by over 1.72 crore taxpayers.
The Central Board of Direct Taxes (CBDT) uses the Non-filers Monitoring System (NMS) to identify and monitor taxpayers who have entered into high-value transactions and have a potential tax liability. The department has tried to keep the compliance cost low in these cases by keeping the entire process online, including making case information available to the taxpayer, e-verification, online response etc.
Related: What makes tax-saving exercise an important financial planning tool?
For whom is filing tax return mandatory?
Individuals below the age of 80 and Hindu Undivided Families having a refund claim or having a total income of more than five lakhs during the previous year are required to file their return. For corporate taxpayers e-filing with digital signature is mandatory. Filing is also compulsory for assessee’s who are required to audit their books of accounts, taxpayers claiming relief under various sections of the Income Tax Act as well as those who are required to furnish a report of audit under different subsections of section 10(23), 80, 92, 115 etc.
Related: Income Tax Returns: Who should file them and when?
How to respond online to this request?
If you have not yet filed your ITR but have a tax liability, it is the right time to log into the Income Tax’s e-filing website and file the return. You can access information related to your case from the Compliance Portal. This portal can be browsed through the e-filing website, i.e. www.incometaxindiaefiling.gov.in
You can file your response electronically on the Compliance Portal and retain the hard copy for documentation purpose. The “Resources” tab in the Compliance Portal contains User Guide and FAQs, should you need it.
What is the Non-Filers Monitoring System (NMS)?
NMS prioritises action against non-filers of IT return who have potential tax liabilities. It identifies tax evaders through data mining and analytics. The tax department issues non-compliance notices under the NMS based on the findings of the NMS. In simple terms, it is a system that is equipped to do high-level analytics and mining on the data available through its various sources.
Related: Top 6 Most Common Mistakes to avoid when filing IT returns
What are the sources of the data analysis?
The NMS based data analysis uses various sources like the Centralised Information Branch, TDS and TCS statements, foreign remittances, Statement of Financial Transactions (SFT) etc.
SFT captures sales, purchases and exchanges of goods, property, rights to property etc.; transactions under work contracts; any investments made or deposits accepted. Basically, Section 285BA defines the guidelines around SFT.
TDS and TCS are available with the department as the deducted amount is deposited with the department and the information is retained by them.
If you want to file your returns online, here's a video that will help you do so in the simplest manner.
