New Delhi: The Income-Tax department has warned taxpayers against misusing the provisions of revised tax returns for the past years to pass off their undisclosed income and escape action under new taxation laws. The move aims to deter those trying to legitimise black money post-demonetisation.
The department said on Wednesday that it would not accept “drastically” revised I-T returns filed by including bank deposits after the government’s currency switch move on November 8, and take penal action against those trying to show their unaccounted money as income incurred in past years.
People have been depositing the demonetised banknotes of Rs 500 and Rs 1,000 in banks, but a large number of tax dodgers have also been trying to legitimise their black money.
Revised I-T returns can be filed only if anyone notices any omission or any wrong statement or after receipt of a tax notice under particular section.
Fudging will attract penalty: I-T
It fears that after demonetisation, some taxpayers may misuse the provision to revise the previous assessment year’s return-of-income for manipulating the figures of income, cash-in-hand and profits. This could be done with an intention to show the current year’s undisclosed income (including the unaccounted income held in the form of demonetised currency in the current year) in the earlier return and escape action.
The government recently introduced stringent amendments to the Income-Tax Act. As part of an income disclosure scheme, the government has also asked tax evaders to declare unaccounted income and escape with a tax and penalty.
The department has clarified that the provisions of revised I-T returns will not be allowed for making changes in the income initially declared so as to drastically alter the form, substance and quantum of the earlier disclosed income.
It has warned that any instance that reflects manipulation in the amount of income, cash-in-hand and profits, and fudging of accounts “may necessitate scrutiny to ascertain the correct income of the year”.