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Mar 11, 2025
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Under tax radar due to high income and low withdrawals? Here’s how you can avoid tax investigation
If your income is high but withdrawals and transactions are very low, then the Income Tax Department may have its eyes on you. Income Tax officials are paying attention to cases where there is a big difference between declared income and spending pattern. If a person’s declared income is high, but cash withdrawals or digital spending is low, then it can be considered a sign of undeclared income and investigation may start.
According to CA (Dr.) Suresh Surana, high-income individuals need to ensure that their withdrawals and digital transactions align with their declared income to avoid scrutiny from tax officials. “A significant mismatch between the income report in the tax returns by the taxpayers and their spending patterns, such as low cash withdrawals or minimal digital transactions despite high earnings, may raise concerns about undeclared income, leading to potential scrutiny or tax investigations.”
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