Filing income tax returns: Here’s how to avoid being labelled a tax evader

The income-tax department on Wednesday warned salaried-class taxpayers against using illegal means while filing their returns, stating that violators would be prosecuted

Income tax department asks 10 PSU firms to pay more tax

Filing income-tax returns (ITRs)? Take note: Those who furnish incorrect information while filing ITRs will be reported to their employers and punished under the law, the Income Tax Department on Wednesday warned salaried-class taxpayers. The I-T department’s Central Processing Centre (CPC), which receives and processes ITRs, in Bengaluru, has issued a “cautionary advisory” warning taxpayers that they should not “fall prey” to tax advisors or planners who help them prepare wrong claims to get tax benefits.

The I-T department’s warning comes after its investigation wing in January unearthed a racket by employees of information technology companies based out of Bengaluru who werre allegedly helped by a tax advisor to get fraudulent tax refunds. Do you think this is a small matter? Think again. The Central Bureau of Investigation (CBI) recently registered a criminal case to probe this nexus.

The latest ITR-1 form, largely used by the salaried class of taxpayers, has been activated on the official e-filing portal of the income-tax department.

Here are the top 10 things that you need to know before filing your income-tax returns:

1) Don’t give wrong info in your ITRs: The Income Tax Department on Wednesday warned salaried-class taxpayers against using illegal means while filing their returns, stating that violators will be prosecuted and their employers will be intimated to take action against them.

2) No under-reporting of income or inflated claims: What ‘illegal means’ is the I-T department referring to? The warning refers to under-reporting of income or “inflating” of deductions.

Calling it a “cautionary advisory” on reports of tax evasion by under-reporting of income or inflating deductions or exemptions by salaried taxpayers, the I-T department said such attempts “aided and abetted by unscrupulous intermediaries have been noted with concern”.

3) Wrong claims to be seen as tax evasion: What action will the I-T department take if it detects such wrong information in your ITR? The taxman has warned that wrong claims will be treated as cases of tax evasion. Such offences are punishable under various penal and prosecution provisions of the Income Tax Act, it said.

The one-page advisory added that if the department notices any fraudulent claims in the ITRs, such claims “may be punishable under provisions of the IT Act and this may also delay issuance of their refunds”.

“Taxpayers, are, therefore strictly advised not to fall prey to false promises or mis-advice by unscrupulous intermediaries and submit wrong claims in their ITRs, which would be treated as cases of tax evasion,” said the advisory.

4) This advisory applies to government employees as well: In case government or public sector undertaking employees make wrong claims and are caught, the I-T department will inform the vigilance division of their place of employment. Subsequently. the vigilance division will take action under conduct rules.

5) Extensive risk analysis system to catch wrongdoers: How will the taxman catch you if you file wrong information in your ITR? The advisory added that the I-T department possesses an “extensive risk analysis system”. This is an automated system that has no human interface. It identifies persons who are non-compliant and aim to subvert the trust based-system “envisioned” while processing of ITRs at the CPC. “In all such cases of high risk, the department may examine and verify the details submitted by taxpayers in their ITR subsequent to the processing of returns,” it said.

6) Tax advisors and planners can be punished, too: The I-T department also asked tax planners and advisors to “confine their advice to taxpayers within the four corners of the IT Act” and warned that the violators will be prosecuted and such instances will also be referred to enforcement agencies like the CBI and the Enforcement Directorate (ED) for criminal prosecution.

7) ITR-1 forms available now: The latest ITR-1 form that is largely used by the salaried-class of taxpayers is now available on the official e-filing portal of the Income Tax Department. The single ITR form, notified by the Central Board of Direct Taxes (CBDT) on April 5, has been put on its website, https://www.incometaxindiaefiling.gov.in, on Monday.

Click here to read → Filing Income tax returns

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Just two days left: Aadhaar-PAN linking mandatory from July 1 for taxpayers

As many as 2.07 crore taxpayers have already linked their Aadhaar with PAN

Aadhaar, aadhaar card

Today’s Paper : The government has made it mandatory to link existing Aadhaar numbers with PAN of taxpayers with effect from July 1.

Amending income tax rules and notifying the same, the government has made quoting of the 12-digit biometric Aadhaar or the enrolment ID a must at the time of application of permanent account number (PAN).

Finance Minister Arun Jaitley through an amendment to tax proposals in the Finance Bill for 2017-18 had made Aadhaar mandatory for filing income tax returns and provided for linking of PAN with Aadhaar to check tax evasion through use of multiple PAN cards.

The revenue department said “every person who has been allotted PAN as on July 1, 2017, and who in accordance with the provisions of sub-section (2) of section 139AA is required to intimate his Aadhaar number, shall intimate his Aadhaar number to the principal director general of income tax (systems) or DGIT (systems)”.

Besides, it entrusted principal DGIT (systems) or DGIT (systems) with specifying the formats and standards along with procedure for verification of documents filed with PAN application or intimation of Aadhaar number.

The rules will come into force from July 1, 2017, the revenue department said while amending Rule 114 of the I-T Act, which deals in application for allotment of PAN.

As many as 2.07 crore taxpayers have already linked their Aadhaar with PAN.

There are over 25 crore PAN card holders in the country while Aadhaar has been issued to 111 crore people.

Earlier this month, the Supreme Court had upheld the validity of an I-T Act provision making Aadhaar mandatory for allotment of PAN cards and ITR filing, but had put a partial stay on its implementation till a Constitution bench addressed the issue of right to privacy.

Pursuant to this, the Central Board of Direct Taxes (CBDT) had said the linking of Aadhaar and PAN will be a “must” for filing of income tax returns (ITR) and obtaining PAN from July 1.

While Aadhaar is a biometric authentication issued by the UIDAI, PAN is a 10-digit alphanumeric number alloted by the I-T department to individuals and entities.

Linking PAN to Aadhaar is now compulsory. Here’s how to do it

1.08 cr assessees done with linking; over 25 cr PAN card holders, 111 cr Aadhaar holders in India

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If you have not linked your Aadhaar with your PAN on the income tax portal yet, you should not delay it. As per latest circular from income tax (I-T) department, it is now mandatory to link Aadhaar and (PAN) permanent account number while filing tax returns.

The rule which will be applicable from July 1, 2017 is aimed at tax evaders who hold multiple PAN cards to escape paying tax. Therefore, after linking both the Aadhaar and PAN, the government hopes to keep tabs on the taxable transactions of a particular individual or entity, whose identity and address will be verified by his Aadhaar card

By linking the two, entities will no longer have to submit their Income Tax acknowledgement to the I-T department, thus saving tax payers a lot of trouble.

When linking, make sure that name, date of birth and gender displayed on the income tax website matches with the detail on your Aadhaar Card. Here’s how to do it:

  • The first step towards linking Aadhaar with PAN is to register on Income tax e-filing portal.
  • If you are an already registered user on e-filing portal, login to e-filing portal of Income tax department by entering your PAN as User ID, date of birth and password.
  • On logging in to the site, a pop up window will appear prompting you to link your PAN card with Aadhaar card.
  • You can input your Aadhaar number enter ‘captcha’ code and click on ‘link now’.
  • In case you have decided to link Aadhaar with PAN later click on ‘later’ button.
  • On logging, if no pop up window appear, go to profile Setting and click on ‘link Aadhaar’.
  • Enter your Aadhaar number enter captcha code and click on ‘link Aadhaar’.
  • The system will match your name, date of birth and gender with PAN card and Aadhaar database, if detail matches, you will get the message “Aadhaar – PAN linking is completed successfully.”

Around 1.08 crore assessees have Aadhaar-linked PAN but the number is abysmally low as there are over 25 crore PAN card holders in the country, while Aadhaar has been issued to 111 crore people. According to statistics with the tax department, only six crore people file income tax returns at present. (readmore…)