The Taxman Will Be After You If You Committed These Offences

In the recent past, the Income Tax (I-T) Department has upped its ante against those trying to evade taxes. As has been seen recently, misreporting of income can land you in great trouble. Here is a look at the nature of the offence and the punishment you will attract in case you fail to report your income with the government.

If they smell a rat 

Recently, the I-T department issued an advertisement, asking the public to help it nab tax evaders. In case your next-door neighbour suspects you have been unlawfully hiding your riches, he can tip off the taxman about it. Soon enough, these men will knock at your door, and search your premises.  

Section 132 of the I-T Act empowers the taxman to initiate search proceedings at premises of the taxpayers. While they are at it, the taxman has the right to seize your valuable ─ cash, gold, jewellery, expensive furniture, fine pieces of art, et cetera.

In case it is not possible to physically seize a certain object, the taxman under Section 132(1) is empowered to seize the asset while letting it be at your premises. The property owner will be liable to make sure the seized object is not removed from the place without the prior permission of the authority.

Risking it all: What happens in case a taxpayer is not able to pay his liabilities? In such a case, the taxman will take in possession your property to recover dues. And, there is no getting away with it. If you try to fraudulently “conceal, transfer or deliver” this property to another person to prevent that property from being attached, the taxman will initiate action under Section 276 of the Act.

Did you fail to credit TDS with the govt?

To ease the process of tax collection, the government has mandated income generators with the task of deducting tax at source, popularly known as TDS (tax deducted at source). This amount has to be credited with the government within a stipulated timeline. In case you fail to credit the amount with the government, action will be initiated against you under Section 115-O (2) of the Act. The same is true in case of dividend distribution tax.

Did you win a lottery and not share the winning with the govt?

Now, did you hit a jackpot and won a lottery? Did you solve a crossword puzzle and won a great deal of money? In these cases, you are supposed to pay taxes on your earnings, under prescribed under Section 194B. In case of any failure in this regard, legal proceedings will be initiated against you under Section 276B. The punishment may include rigorous imprisonment and a penalty.

You may also like to read: Everything A Homebuyer Needs To Know About TDA

Trying to willfully evade tax? 

Section 276C of the I-T Act empower the taxman to initiate legal proceedings against you in case you are trying willfully evade tax, penalty and interest, or have under-reported your income. In case you willfully furnish false details with respect to your income, you will be prosecuted under Section 276CC. For making false statements, you will be prosecuted under Section 277.

Did you help someone evade taxes?

Make no mistake, you will be held equally responsible if you assisted someone, including your family members, evade taxes. The taxman will go after you and initiated proceedings under Section 277A. Any statements made by you that you know to be false will also make you guilty in the eyes of the law. 

Did members of your undivided family commit a crime?

In case an offence has been committed by a member of a Hindu Undivided Family (HUF), the head of the family, known as the karta, is deemed guilty of the offence. This liability has been fixed by bringing in an amendment through the Finance Act, 2017. Under Section 278C of the Act, the head of a family will be held guilty and punished accordingly. However, the head of the family will not be liable to any punishment if he proves to the taxman that the offence was committed without his knowledge. He can escape punishment also by proving that he tried all in his capacity to stop the offence from taking place. Members of an HUF will also be held guilty of it if found that the family has committed an offence and with the consent or connivance of those members.