Non-filers Monitoring System (NMS) : Another masterstroke by Govt

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Non-filers Monitoring System (NMS): Another masterstroke by Govt.

The current Government is widely appreciated for its implementation of schemes to recover taxes from people. Along with demonetization and GST, the government has been actively using NMS or Non-filers Monitoring System to bring the people under the tax net.

If your bread butter is liable to tax in India, please make sure you file your income tax return. BEWARE you are being watched and you may be under the scanner of the Finance Ministry & CBDT. The Income tax department of India has identified such non-filers who have not filed the income tax return.

The Income Tax department (I-T) has issued notices and ordered stringent action against individuals who are yet to file the income tax returns (ITR) for the Assessment Year 2018-19 ( Financial year 2017-18). Such people have been identified through Non-filers Monitoring System (NMS) an analytical tool of the Central Board of Direct Taxes (CBDT).

What is Non-Filers Monitoring System (NMS)?

 Non-filers Monitoring System is an information network which gathers data from various sources and mines that data. They identify and monitor people who have done high-value transactions and have potential tax liabilities but have still not filed their tax returns.

The NMS is the combined result of the information  gathered through

Annual Information Return (AIR): This provides the details of high-value financial transactions furnished under section 285BA of the Act.
Centralized Information Branch (CIB), information about foreign remittances, export-import data, etc.
TDS/TCS Statements and records etc.

Which transactions are identified in NMS?

Typically, NMS can identify/record the following transactions. Hence, if you have incurred these transactions but haven’t filed the return, your case is likely to get triggered

Cash Payments in the following events in a financial year:

  • For purchase of bank drafts or pay orders or banker’s cheque, totaling Rs. 10 Lakh.
  • For any pre-paid instruments like smart cards, magnetic chip cards, internet accounts, wallets etc issued by RBI and totaling to Rs. 10 Lakh
  • Cash deposit/withdrawal totaling to Rs. 50 Lakh or more.
  • Cash deposits in one or more accounts amounting to Rs. 10 Lakh by an individual except for deposits in current accounts
  • Cash Payments for the sale of goods or services made by any person of Rs. 2 Lakhs

Any Deposits amounting to Rs. 10 Lakhs or more in a single financial year.

Any of the following payment in a single financial year by any person:

  • up to Rs. 1 Lakh or more in cash;
  • Rs. 10 Lakhs or more by any other mode,
  • against credit card bills of one or more card

Receipt from any person aggregating to Rs. 10 Lakhs or more in a financial year for acquiring bonds or debentures (other than on renewal) issued by the company or individual.

Payment towards shares to a company, amounting to Rs. 10 Lakhs in a financial year.

Buy Back of shares by any person, totaling Rs. 10 Lakh or more in a financial year.

Receipt of money for acquiring units of mutual funds (in one or more schemes)  acquired by any person totaling to Rs. 10 Lakhs or more in a financial year.

Receipt for sale of foreign currency involving credit or expense in such currency through a currency card or debit card or credit card or through traveler’s cheque or draft or any other instrument – an amount aggregating to Rs. 10 Lakhs or more during a financial year by any individual.

Immovable property bought or sold by any person of an amount of Rs. 30 Lakhs or more or valued at Rs. 30 Lakhs or more by Stamp Authorities.

Cash deposits during the interval of 9th November 2016 to 30th December 2016

  • which sums up to-Rs. 12,50,000 or more, in one or more current account of a person; or
    • Rs. 2,50,000 or more, in one or more accounts of a person (other than the current account)
  • Cash Deposits between 1st April 2016 to 9th November 2016 in respect of accounts that are reportable as above for Cash deposits during the interval of 9th November 2016 to 30th December 2016.
  • Form 26AS showing details of tax deducted by a person.

What to do if you are a Non-Filer?

The Finance Ministry on 22nd January 2019, identified and requested the Non-filers to assess their tax liability for AY 2018-19 and file the Income Tax Returns (ITR) or submit online response within 21 days.
In case no ITR filed or no response is provided, the Income Tax department will initiate the proceeding under the Income-tax, 1961.
So if you have incurred the high-value transactions in FY 17-18 but not filed IT Return, you are a Non-Filer. Please note that there is No need to visit the Income Tax Office. You can respond to the queries “Online”.
Follow the steps mentioned below:
  • Check your email ID, mobile phone and letters received at your registered address if any  from the Income Tax Department
  • Do check the transactions through your bank statements, trading account or any other documents before filing any responses.
  • Log in to and navigate to the Compliance portal available in “My Account”.
  • Information details are available under the e-verification menu of Compliance Portal.
  • Respond to queries appearing in the “Compliance” section
  • Upload the details or submit the return or record the response that you are not liable to tax. Just keep a printout of the submitted response for record purposes.
  • Take the help of a consultant or CA for any further action needed.


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About CA Janhavi Phadnis 78 Articles
Chartered Accountant and financial consultant. She has worked with corporates for 14 years with expertise in Forex-Treasury, Accounting, and Corporate Tax. She can be contacted at

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