Data analytics has pointed out that these taxpayers were donating in proportion to their income and expenditure. Apart from companies, the people to whom the notice has been sent include salaried and self-employed.
The Income Tax Department has sent notices to around 8,000 taxpayers. The department suspects that these people have evaded tax in the name of making huge donations to charitable institutions. Companies, businessmen, salaried people and people running business are also among the recipients of the notice. All the people have been asked to respond by sending notices between March and April 1.
According to the Income Tax officer, some things are common in the 8,000 cases in which notices have been sent. In these cases, the donation of the exact amount has been shown, which was necessary to reduce the tax slab or get complete exemption. In addition, cash was donated in all cases. Similarly, some income tax payers dependent on salary income have paid exorbitant amounts to tax professionals.
Now notice will be issued to more people
According to the Economic Times, all these transactions have been done during the years 2017-18 to 2020-21. Income Tax officials say that more notices may be issued in such cases in the coming days.
This is how the game happened
Officials say that the amount donated by many businessmen and companies to charitable institutions does not match their earnings. In such cases, some charitable organizations deduct a commission and give the remaining cash amount and donation slip to the donor, thereby helping in tax evasion. The department is also tracking trusts that offer bogus bills to taxpayers. Do and no action has been taken so far on such charitable trusts. If this discrepancy is found in the investigation, then the status of tax exemption from such charitable trusts will be snatched.
Contributions to certain funds and charitable institutions are allowed as a deduction from income under Section 80G of the Income Tax Act. Depending on the nature of the institution, 50-100% of the contribution can be allowed as deduction. Such donations are also subject to income limits.
