The Centre has given one lakh notifications for failure to file taxes, underreporting income, and misrepresenting sources of income, according to Union Finance Minister Nirmala Sitharaman on Monday. 

The notifications, according to her, were sent when the income was discovered to be close to Rs 50 lakh, and they are anticipated to be paid by the end of current fiscal year. 

All of these cases, the minister stated during remarks at the 164th Income Tax Day festivities, involve old returns that were filed four to six years ago. 

"One lakh notices are sent where information is available that income is more than what you have filed, or there are reasons to believe that income has been understated or where they have not filed it and information is there that they should have filed it," Sitharaman said.

Later, officials verified that the letters were mostly given to those with yearly incomes exceeding Rs 50 lakh and that they were sent throughout the previous 14 months.

Officers are permitted by income tax legislation to revisit assessments that are up to six years old. The minister also mentioned that the CBDT finished its examination of the 55,000 notifications it had given in response to a Supreme Court ruling in May 2023.

She continued by saying that, as opposed to before, when taxpayers had to preserve documents for 10 years, tax assessments are now closed after six. Only in specific circumstances do they (tax authorities) reconsider assessments in the fourth, fifth, and sixth years, according to Sitharaman.

The government has processed more than half of the more than 4 crore income tax returns (ITR) that have been submitted so far for the fiscal year 2022–23, according to Central Board of Direct Taxes (CBDT) chairperson Nitin Gupta, who was speaking at the same session. This has resulted in Rs 80 lakh in refunds.

He continued by saying that the Income Tax department has a lot of work that is unfinished owing to a lack of staff. He pleaded with Sitharaman to swiftly accept the cadre reorganisation suggestion.

A record 74 million income tax returns (ITRs) were filed in FY23, according to data given by the finance ministry earlier that day in Parliament, however 51.2 million, or 70% of them, were zero-tax returns, indicating the filers claimed no tax responsibility.

Despite a 14% rise in ITRs over the course of four years to FY23, there were 51.2 million more people who filed zero tax returns during the same time, a 77% increase.

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