When Parbhod Anand sold his flat, he kept in mind the tax implications of the transaction. The buyer was asked to deduct 1% TDS and deposit it under Anand’s and his wife’s names as they were joint owners. Anand also reinvested the sale proceeds in another flat to save tax on the capital gains.
So, it came as a shock when his wife got a tax notice last month. “The notice says she made capital gains from the sale of the flat, but the gains were reinvested to buy another house.
What should we do?” wrote the couple to ET Wealth last month.
Where did Anands go wrong? The new flat is registered only in Anand’s name, so the capital gains booked by his wife from the sale of the jointly owned flat remain uninvested and, hence, are taxable.
This is just one of the many slip-ups that could result in a notice from the tax department. The tax authorities have spruced up their efforts to catch evaders. The new ITR forms seek detailed disclosures, no scope for taxpayers to conceal income in their returns.
Moreover, the Central Board of Direct Taxes (CBDT) has made it mandatory for everyone to file their returns online, barring super senior citizens above 80 years of age. The tax records are integrated online, so even a small mismatch in detail can be detected and can result in an enquiry.
However, not all tax notices should be a cause for concern. For instance, in the case of the Anands, the purchase was made in December
The tax department usually issues notices after the return has been filed or after the assessment year has ended. This seems to be a gentle reminder that the wife should file her ITR and pay tax by disclosing this transaction,” says Karan Batra, a Delhi-based chartered accountant. “Tax authorities have started sending such intimations to a lot of assessees,” he adds.
Similarly, simple calculation errors may get you a demand notice, asking you to pay due tax. However, in the case ….Read More>>>