Why Should You File Income Tax Return?

광고 Tax Evasion

According to the Income Tax Department, you should self-assess your income and pay your taxes accordingly. Most of the people assume that the income tax return is worthless. Hence, they either end up by not declaring the income or understate it as it saves some amount of money.Knowingly, if you hide your income from the authorities to reduce your liability, you should face consequences. Such consequences include paying huge penalties or behind the bars. Income earned through interest for bank fixed deposits or accepting the money in cash is also covered under tax evasion tax-ai.

Methodology

To catch hold of cases of tax evasion, the Income Tax Department uses a Computer-Aided Scrutiny System (CASS) which picks cases by inputting various criteria. The system may select you if you fall under this criterion. The resultant could be that you can come under scrutiny which causes trouble. You may be required to furnish all details which include, bank account statements, assets owned by you and your family, and details of all family members who reside with you. Once the data is collected, the officer will do a math analysis of income and expenditure to calculate the amount of tax evasion.

The officer can serve the scrutiny notice within a year from the end of the month in which you have filed your return. So, if you had filed your income tax return for the financial year endedMarch 31, 2014, on July 24, 2014, you may get a notice on or before July 31, 2015. The notice is a template that contains your name, address, PAN and the year in which it is issued, time and date when you should appear before the income tax officer. It is not mandatory that the tax payer should appear personally before the officer. However, the payer can authorize a representative to plead the case.

Impact of tax evasion

An individual who conceals income will be charged a penalty and it can be anywhere up to three times the amount of tax evaded. Hence, if your tax evasion is 50,000 INR and if your account is under scrutiny, most likely, you will end up paying anywhere between 50000 INR and 150000 INR.

If you are falling under the tax man’s scanner, you will not have peacefulness in your life. Hence, it is valid to comply with the income tax regulations