Here is a warning that taxpayers should never ignore: Income tax return under reporting of income must never be attempted. Now that we have your attention, read on. Tax season is hot and it is racing toward its final stretch in the month of July. All taxpayers in the country would be looking at filing their income tax return or else they should get set to face the consequences, which includes being penalised by the Income-tax department under Section 270A of Income Tax Act.
While filing income tax is something everyone must do, there are some things that should never be done knowingly or unknowingly as the consequences will be severe under the Income Tax Act. One of the most serious offenses is if some anomaly creeps into the taxpayers income tax return. What we are talking about is the Income tax return under reporting of income.
While filing your income tax return, a taxpayer should list his total income properly, make the deductions from it as per the investments made in PPF, mediclaim, home loans or any others, and finally come up with the amount payable to the taxman on the taxable income. Nothing extra should be included.
So, what is the income tax return under reporting of income? According to the Income-Tax department this means an act of intentionally or unintentionally reporting a lower income. Not just that, it also includes not reporting income at all in the income tax return. The I-T dept says, “The scenario of under reporting of income is mentioned under section 270A.”
However, if a taxpayer feels he has been hard done by, he can file an appeal. What is this appeal? The I-T dept says, “Appeal is a process by which a person (assessee or revenue) aggrieved by an order passed by the tax authority or judicial authority, as the case may be, can challenge it before the higher judicial authorities.”
One of the solutions available is also called compounding of offenses. The department says, “Compounding of an offence is a mechanism whereby the defaulter is reprieved of major legal consequences by affording him with an opportunity to pay a sum of money to escape prosecution.”
Under reporting of income tax penalty is quite hefty. The penalty under Section 270A can be as high as 50% of the tax due on the under-reported income, ClearTax said. And when it comes to misreporting of income, the penalty is 200% of the tax due.
What is the income tax return under reporting of income? Find out now before you file your income tax to avoid problems, including penalty, later. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
