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The income tax department has issued a warning that any attempt by salaried employees to under-report their income or inflate deductions will result in a serious action. The advisory states that such offenses will be punishable under various penal and prosecution provisions of the Income Tax Act.
The warning has been issued, following the notification of new income tax return (ITR) forms by the department. Under the new ITR forms, you need to disclose detailed information about your income and deductions compared with previous ITR forms. For example, the break-up of your salary now includes various deductions that need to be given under revised forms. Similarly, details under income from the property including gross rent received, tax paid to local authorities, annual value, interest payable on borrowed capital are required to be filed. To avoid the late filing of ITR the department has also levied penalties from this year onwards. For example, there is a late fee of Rs 5,000 if the return is furnished after July 31st but on or before December 31, 2018. July 31st, 2018 is the due date for filing ITR this year.
The warning states, “The Income Tax Department has an extensive risk analysis system aimed at identifying persons who are non-compliant and aim to subvert the trust-based system envisioned while processing of ITRs at CPC Bangalore. In all such cases of high risk, the Department may examine and verify the details submitted by taxpayers in their ITR, subsequent to processing of returns in CPC. If the Department notices any fraudulent claims on the returns, such taxpayers may be punishable under various provisions of the Income Tax Act. This may also delay issuance of refunds in such cases.”
Recognising the role of intermediaries the notice states that the department may prosecute them under relevant sections of the Income Tax Act- “The Department also advises all intermediaries to strictly confine their advice to taxpayers within the four corners of the Income Tax Act.”
Off lately, chartered accountants have been under attack due to their widely prevalent tax evasion practices. In order to make them accountable for their actions, experts say, strict measures are needed to bring them to book.
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