All those of you who are earning income from sources or receiving salary, so when did you last pay your tax? We are all so concerned about our future, that we plan for extra income, savings and other investments to aid us, but do we ever go in the moral path? Almost a majority of the people in the world make attempts to evade tax payment, although they are financially steady. And the latest update you need to know is that, failure to pay tax may lead to prosecution.
Why pay the tax?
Income tax is that share paid by every citizen of their respective country, when their income goes beyond the basic limit set by the Income Tax department. The amount that is paid as tax is used for the development of the country or locality.
It is the right of every citizen to pay his/her tax on time, and contribute towards the development of the nation. Every citizen who is entitled to all the facilities and freedom of the respective nation is also liable to pay tax.
Common cases of tax evasion
Tax evasion has become an easy and clever task now. There have been found several ways in which payment of tax can be evaded. Upon discussing this issue, the Supreme Court has appointed a Special Investigation Team (also called SIT) to hunt and pull out cases of black money. The SIT has been working on amendments to prevent tax evasion on the following cases:
- Possession of property in foreign countries. It is being said that amendments need to be made in the FEMA (Foreign Exchange Management Act) regarding the confiscation of properties abroad with equivalent value to Indian money.
- Excessive possession of cash, which is the black money. The SIT has suggested that there be a limit for holding cash in hand, not exceeding Rs.15 Lakhs.
- Creation and submission of bogus bills of an amount exceeding Rs.1 Lakh. This is found to be the most common method of tax evasion. In order to curb this practice, the SIT has recommended that the PAN or Aadhaar card number should be used to register, each time a transaction is made, that exceeds Rs.1 Lakh.
Prosecution for tax evasion
To bring an end to all the malpractices for tax evasion, the Special Investigation Team has recommended and is about bring in to action, to make jail term the result of tax evasion. As there are many cases found here, the only way to bring tax evasion down is by announcing prosecution. The SIT is conducting a thorough scrutinization, to figure out all cases of black money.