Income Tax Scrutiny Can you Save Yourself From IT?
Evasion of income tax is a serious crime and everyone is expected to pay tax on the income they have earned annually. There are many who try to hide their certain income resources by different malpractices. But in the end if you are found guilty you not only have to pay the tax amount, you are also penalized.
As a good citizen of India you are expected to file income tax returns regularly. If you avoid paying taxes or misrepresent the payable tax amount in your returns, it is considered as an illegal activity. You may have to face the scrutiny from the income tax department in case the tax officials feel that you have been evading the tax. So, firstly to be on the safer sides never reduce or conceal your tax liability.
What Is Income Tax Scrutiny?
Income tax scrutiny means finding out whether the income tax returns displayed by the individual are authentic or misrepresented. So as to find the truth about your returns, the income tax officials will go through all the submitted income tax return documents along with bank statements, investment papers, purchased costly objects such as car or jewelry, credit card statements, Form no. 16 and more. If the officials become suspicious they can also ask for the details of all the family members.
What If You Are Guilty Of Evading Tax?
In case if you are found guilty of not paying appropriate tax amount, you will be served with scrutiny notice within a year prior to your filing the return. The notice has a set standard format and contains all the relevant information about the tax payer and date on which he is expected to appear in front of the concerned income tax officials. It is not necessary for the tax payer to attend this meeting in person. He can send his representative, or chartered accountant to plead the case for him.
Documents Necessary For Filing Returns
Everyone has a fear of getting traced in the random search of income tax return. But if you will mention the following investment in your income tax returns you will be saved from the hassles of income tax penalty:
- Transactions in cash of 10 lakhs or above
- Bills of credit cards of 2 lakhs or above
- Investment in mutual fund of 2 lakhs or above
- Purchase of debentures or bonds of 5 lakhs or above
- 1 Lakh or above purchase of shares
- Sale or purchase of immovable property of 30 lakhs or above
- RBI Bond purchase of 5 lakh or above