One of the most common concerns in the NRI community is: “Why did I receive a notice from the Indian Income Tax Department despite not living, working, or earning in India for many years?”
At first glance, it may feel confusing or even unjustified. However, the answer lies in how the modern tax administration system works — it is data-driven, automated, and intelligence-based.
The Core Reason: Investment vs Declared Income Mismatch
Even if an individual is a Non-Resident Indian (NRI), Person of Indian Origin (PIO), or Overseas Citizen of India (OCI), a tax notice can still be triggered when:
- Investments exist in India (such as Fixed Deposits, Mutual Funds, or Immovable Property), but
- No corresponding taxable income or disclosure or non-filing of Indian Income Tax Returns (ITR).
This creates a variation between declared income and financial footprint, which is automatically flagged by the Department’s AI-based risk assessment system.
The Income Tax Department receives financial and investment information from multiple statutory and international sources, including:
- TDS / TCS Reporting
- Reporting by Financial Institutions such as Banks, Cooperative Banks, Asset Management Companies (AMCs)
- Exchange of Information Under International Treaties
- Global frameworks like CRS (Common Reporting Standard) or FATCA.
Receiving a notice does not automatically mean wrongdoing. In many cases, it simply means:
- Clarification of sources of income is required Return filing was missed
- Information mismatch exists in records
Timely response with proper documentation generally resolves the matter.
Replies should be drafted in professional and technical language, supported by relevant provisions of the Income-tax Act, documentary evidence, and applicable judicial precedents.
General or layman explanations are usually not accepted in assessment/reassessment proceedings or summons.
Confused about TCS, LRS & money repatriation from India?
