Income Tax Department becomes more VIGILANT

Income Tax Department becomes more VIGILANT

The Income Tax department has started a new drive to catch Tax evaders. In order to catch tax evaders and black money hoarders it has started collecting information related to high value transactions of purchase/ sale, investment and other expenditures in the income tax return itself. Further it also collects corresponding information from Banks, financial institutions, mutual funds AMCs and land revenue department and security depositories to cross check the same from the filed tax return of the tax payers.

Today we shall share with you the important nature of transactions which you must disclose in you tax return. As the income tax department may take serious action in case of non disclosure and in case of tax evasion the consequences may involve levy of interest and penalty upto 300% of tax evaded and also launching prosecution.

Income Tax Department collects information about your investments/expenses related to:

1.Purchase or Sales of immovable property valued at Rs 30 lac or more;

2.Credit card expenditure exceeding Rs 2 lac per annum;

3.Mutual fund investments excess of  Rs 2 lac;

4.Purchase of Bonds or debentures of a company or an institution for 5 lac or more in  a year;

5.Cash deposits of Rs 10 Lac or more per annum in your saving bank account;

6.Payments of Rs 1 Lac or more for acquiring shares of a company through its public or rights issue;

7.Purchase of bonds issued by the reserve bank of India amounting in aggregate to Rs 5 lac or more in a year;

As mentioned earlier banks, financial institutions, Mutual Fund Asset Management Companies, land revenue department and security depositories are instructed to furnish the particulars of tax payers falling under any of the above criteria.

As per the press release of the Income tax department, it has information about:

◦40,72,829 persons who made cash deposits exceeding 10 lac or more in their savings bank account;

◦40,40,396 persons who purchased mutual fund unit of Rs. 2 lac or more, bonds or debentures of Rs. 5 lak or more, shares issued by company of Rs. 1 lac or more and bonds issued by RBI of Rs. 5 lac or more;

◦20,61,443 persons who made payments of Rs. 2 lac or more in a year against their credit card bills;

◦Persons who received interest income of Rs. 50,000 or more from banks;

◦Persons who purchased bullion or jewellery of Rs. 5 lac or more.

Action taken by the Income Tax department

The Income Tax department has already issued notices to more than 12 lac persons who have not filed their Return or who have not disclosed the above transactions in their return. Department is taking strict action against non filers and tax evaders by way of levy of Interest, penalty and launching prosecution in several cases.

Consequences

Apart from mandatory levy of interest, Failure to declare your correct income may lead to penalty upto 300% of the evaded tax and you may also face prosecution.