Published Editorial

Does taxman know you’ve moved?

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The Hindu Business Line

by

Alok Agrawal
Director, Tax & Regulatory Services
EY

Contributed by:

Aditya Modani
Senior Tax Professional
EY

“Greener pastures” was the response when Nitin, an IT engineer from Gurgaon, was asked why he relocated to Hyderabad last year. Today, he has to deal with notices from the tax officer in Gurgaon for the income tax returns he filed in the previous years. As the notices were sent to his old address, Nitin did not receive them until it was past the due date for the response. Work commitments prevented him from travelling to Gurgaon to meet the tax officer.

Many, like Nitin, relocate to different cities within India and face similar challenges. A lot of them forget to update personal details (such as address and mobile number) at their bank, financial intermediaries and the tax office, leading to hardships later in their financial planning and tax compliance. Ideally, at the time of relocating, Nitin should have updated his income tax records (through the National Securities Depository Ltd or NSDL) by filing a ‘Request for changes or correction in PAN data’ on the PAN services Web site (www.tin-nsdl.com), or at the PAN centers managed by NSDL. After verifying the information, NSDL will forward it to the tax office and the tax database will be updated. This would ensure that all future notices arrive at his new address. Nitin can still do this, and ensure he receives all future correspondence on time.

To deal with any tax matters that may resurface after relocation, Nitin should approach his jurisdictional income tax officer, intimate the change in address, and request a jurisdiction change to Hyderabad.

To determine the new tax officer, Nitin could approach the Public Relations Officer at the tax office as the jurisdiction could be based on the source of income, employer jurisdiction, or residential address.

An application for change in jurisdiction should be filed with the Gurgaon tax officer and the new jurisdiction tax officer in Hyderabad, stating the reason for the change (new job).

Besides receiving all communication from the tax office at the current location and responding on time, the updated records would facilitate faster processing of returns/ assessments and, at times, refunds that were delayed due to wrong address.

Nitin can also save time and money by not having to travel to Gurgaon to meet the tax officer.

Additionally, the tax assessment orders issued by the tax office can be used as address proof in certain places (such as passport application).

Where the return is filed online, the taxpayer can update his profile and address at the portal and mention it on the tax return.