TaxTMI 
TaxTMI 
Dear sir, I would like to know what would be the pros and cons if I increase my taxable income amount double than previous year on same source of income?
For example: I run a shop, in the fn yr 2015-2016 I had shown rs-200000 as taxable income after all diduction but in the next fn yr 2016-2017 I increase the taxable income by Rs-400000 after all diduction which is double than previous yr with out any business expansion. Then what would be the pros and cons. Would i get any notice from tax department?
Income tax double
24 Mar 2018 
2 Replies 
1048 Views Asked by
Income trend: an upward jump in reported taxable income generally reduces audit risk but requires credible turnover justification.
An upward trend in reported taxable income, including a year on year increase without business expansion, is unlikely by itself to provoke a notice from the tax department, since higher tax payments generally send a positive signal. Persistent unexplained reductions are more likely to trigger scrutiny. The key compliance point is the taxpayer's ability to justify turnover with books, invoices and other documentary support; lacking credible explanation, assessing officers may still question returns. (AI Summary)
An upward trend in reported taxable income, including a year on year increase without business expansion, is unlikely by itself to provoke a notice from the tax department, since higher tax payments generally send a positive signal. Persistent unexplained reductions are more likely to trigger scrutiny. The key compliance point is the taxpayer's ability to justify turnover with books, invoices and other documentary support; lacking credible explanation, assessing officers may still question returns. (AI Summary)