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Lifestyle expenses such as high electricity bills or frequent foreign travel are now key triggers for income tax scrutiny. When annual electricity payments cross one lakh rupees or foreign travel spending exceeds two lakh rupees, mandatory ITR filing is required, even if total income remains below the basic exemption limit. These transactions are tracked through Form 61A reporting, where banks, utilities, and financial institutions flag spending that does not match declared i

Residential status mistakes often trigger income tax notices when the information declared in bank forms, PAN databases, or ITR filings does not match stay details under Section 6 of the Income Tax Act. Most notices arise when NRIs are incorrectly marked as residents, or residents declare NRI status without meeting the day-count conditions. These mismatches lead to confusion in foreign income taxation, DTAA claims, TDS availability, and global income reporting. With cross-ver

GST return filing during business closure or transfer is a mandatory compliance step under the CGST Act. Once a GST registration is cancelled due to closure, sale, merger, or transfer, a final return in Form GSTR-10 must be filed within three months. This return captures details of closing stock, tax liabilities, and input tax credit reversals or transfers. Missing this step can lead to notices, interest, and penalties. Structured handling of final GST returns ensures a clea

Income tax notices under the Income Tax Act, 1961, follow a clear structure that helps identify why the notice was issued, which section applies, and what action is required. Each section points to a specific trigger—mismatches, missing information, scrutiny selection, or defective returns. Reading the notice correctly prevents unnecessary confusion and ensures timely compliance. The necessary details include the section invoked, discrepancies detected, supporting documents d

High business turnover without filing an Income Tax Return immediately triggers compliance red flags under the Income Tax Act. When bank statements, GST data, or AIS entries reflect turnover above statutory limits—such as Rs 1 crore under regular rules or Rs 10 crore under presumptive schemes—the system auto-identifies non-filers. This mismatch commonly leads to notices under Sections 142(1), 143(2), or 148 for unexplained turnover. Many small businesses and professionals are

Misreported or underreported income often results in Income Tax notices triggered by mismatches between the filed return and data captured in AIS or Form 26AS. These discrepancies may involve salary from multiple employers, freelance receipts, capital gains, or TDS credits that do not align with reported figures. Such mismatches prompt notices under Sections 143(1), 142(1), or 148, requiring timely clarification. Penalties for misreporting can reach up to 200% of the tax diff

EXC-001 cash transaction alerts are automated income tax notices issued when banks report high-value or unusual cash deposits that do not align with the income declared in the tax return. These alerts arise from SFT and AIS data, where banks flag deposits exceeding specified thresholds or patterns that appear inconsistent. The purpose is to verify the legitimacy of the cash source and ensure proper tax reporting. When an EXC-001 notice appears, clear documentation, accurate r

Salary mismatches from previous employers often trigger income tax notices when the total salary reported in multiple Form 16s does not match the figures reflected in AIS or Form 26AS. These discrepancies commonly arise after job switches, employer reporting errors, or delayed TDS filings. Notices under Section 143(1) frequently appear when income from a previous employer is missing or incorrectly reported. Automated platforms such as TaxBuddy simplify the process by reconcil

Deduction mismatch notices under Section 143(1) usually occur when claims for 80C, 80D, or similar deductions do not align with the data available in Form 26AS , AIS, or the records validated by the Central Processing Centre. Automated processing identifies differences such as excess claims, missing proof, or incorrect entries, leading to adjustments in total income. These notices push taxpayers to revisit the claimed amounts and validate the supporting evidence. With stric

Unreported property sales often trigger capital gains notices because the Income Tax Department cross-verifies transaction details through the Annual Information Statement and Form 26AS . When a sale appears in AIS but not in the return, the system flags a mismatch, leading to notices under Section 143(1) or detailed scrutiny under Section 143(2) . Capital gains must be calculated and reported in Schedule CG of the appropriate ITR form, regardless of taxable income after exem