HNI Taxpayers not reporting Income and Filing ITR Properly:

HNI Taxpayers not reporting Income and Filing ITR Properly The Income Tax Department is examining the expenditure and expenses related data and patterns of high networth individuals (HNI) who might be paying less tax in comparison to their yearly income. According to a senior income tax officer, an analysis has uncovered that approximately 7 to 8 lakh individuals, HUFs and firms included, earn over Rs. 1 Crore income per year, but still their income is not fully considered in their tax return. The individual said, “Currently, over 3 lakh HNIs pay income tax for income over Rs 1 crore, but a larger number don’t."

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In accordance with data collected officially, around 3.50 lakh income tax returns were filed by the taxpayers in the assessment year 2023-24 (financial year 2022-23), and their income is above Rs. 1 Crore, out of the total 7.97 crore income tax returns (ITRs) filed for the year. One more official said, "The spending pattern tells us that many individuals are not reporting their income properly, and hence paying low tax." Hence, to know their actual income and be taxed accordingly, the income tax department has adopted a new technology of "360-degree profiling" on such high networth individuals (HNI), I-T officer said. The authority is expected to keep an eye on high-value transactions such taxpayers via Tax Collected at Source (TCS) and Tax Deducted at Source (TDS), keeping an eye on their foreign remittances, and examining GST data to correctly assess the HNIs' income, said sources. Various income tax provisions like TCS on Foreign Payment and Luxury Goods have been incorporated to bring HNIs in Tax net. As per numerous tax experts, the government is working harder to increase the number of people who pay taxes. They are especially focusing on rich individuals who have a lot of money and income, but may not be paying taxes that match how much they earn or spend.

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This information can be accessed via Information Technology and can be compared to the filed tax returns. On the basis of made comparison, tax returns can be chosen for study. It is not compulsory that the analysis will be 100% exact. However, this can happen that the real income of individuals is more than that filed in the ITR. Some business owners try to avoid paying taxes by making fake bills or showing more expenses than they really have. This makes it look like they earn less money. Some also file false claims under tax deduction rules or say they run a business that doesn’t actually exist. These tricks help them pay less tax than they should.

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