Return not filed: Double-check with your accountant and get IT acknowledgement for IT return filed. It is likely that one might have missed filing a return in any year, which might raise a question from the IT department. An individual earning more than the basic exemption limit of Rs. 2, 50,000 is required to file returns compulsorily.
Interest from FDs or Savings A/c: Individuals overlook the need to pay proper taxes on interest earned on FDs and savings A/c, which are taxed as per an individual's tax bracket. Though banks deduct TDS on such interest, but the final tax payout depends on an individual's tax bracket. So, a 10% TDS will not relieve an individual in 30% tax bracket from paying tax.
Claiming Higher Tax Refund: Claiming back Rs. 50,000 from Rs. 1, 00,000 of tax paid may attract Income tax department's notice. The amount that crosses a surprise line and appears as a false claim will certainly push the department to question it.
Change of Job: An employee changing job in a single year receives multiple Form-16. So, if an individual does not combine the income from two employers and fails to pay the due taxes, then he might call attention from the income tax department. An employee should always ask his current employer to factor in the income earned from the previous employer so that Form 16 does not lead to double tax exemption benefits.
Full Disclosure: One should not conceal details of tax-exempt items in their income tax declarations. Despite being tax exempt, it is a duty of every taxpayer to come clean about his/her transactions. Income tax department could scrutinize one's tax return at any point of time and thus, disclosing all facts are in the best interest of the taxpayer.