CBDT warns against revised I-T returns
What's the story
India's CBDT tax authorities have issued a warning against those altering their income tax return forms drastically after 8 November. This comes in the wake of many tax payers revising their income tax returns after demonetisation came into effect. Reports stated that a stern penalty amounting to 100-300% of the tax evaded can be charged against those manipulating their I-T returns.
About
CBDT
The Central Board of Direct Taxes (CBDT) comes under India's revenue department's umbrella. The board manages the income tax department and plays a significant role in providing inputs on the planning and collection of direct taxes. In June this year, the government enabled the income tax officers specialising in tax recovery to arrest and detain wilful defaulters, in an attempt to curb tax evasion.
Scrutiny
Demonetisation sees I-T department on high alert
With demonetisation coming into effect, India's income tax authorities have resorted to scrutinising high-value transactions. When the announcement on demonetisation was made, there was a 52-day window period to exchange and deposit old currencies. Deposits of over Rs.2.5 lakh during the period will be scrutinised. CBDT also highlighted penal action on deposits of over Rs.10 lakh, if it was disproportionate to their declared income.
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CBDT's measures to seize tax evaders
"Cash hoarders could have misused the erstwhile provisions by depositing an amount less than Rs.50,000 on various occasions without quoting their PAN. The CBDT has brought two-fold amendment casting a reporting responsibility on the taxpayer and the bank," said Rakesh Nangia, Nangia & Co.
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I-T to scrutinise revisions made to declared income
"Any instance coming to the notice of the I-T department which reflects manipulation in the amount of income, cash-in-hand, profits etc and fudging of accounts may necessitate scrutiny and may also attract penalty and prosecution in appropriate cases as per provision of law."- I-T notice
I-T returns
When should you revise your returns?
Under the I-T Act, any revisions to an I-T return can be made only if the person who has filed the return realises any omission or wrong statements in it. Recently, many taxpayers are using this provision to file revised returns to declare their unaccounted income and disguise it as income for the current year. This results in unaccounted money reflecting as accounted money.