Tax evasion is a crime. Tax avoidance is not. If you are a salaried employee, there’s bad news. The Income Tax Department has warned salaried employees not to under-report income, while filing ITR. What does this mean? If you are a salaried employee, the income tax department has warned you, not to inflate tax deductions/exemptions while filing Income Tax Returns. This is punishable under the Income Tax Act.
So why has the income tax department issued this warning? Many tax advisors and tax planners are helping their clients evade tax, by helping them prepare wrong claims to enjoy tax benefits.
Learn how salaried can save tax. Want to know more on tax planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.
Take a look at this fraud. The IT Department detected a tax refund fraud by employees of IBM and Infosys. Employees of more than 50 Prominent and mid-sized Companies, were under the scanner of the IT Department. So what was this fraud?
Employees of prominent Companies IBM, Infosys and Vodafone connived with a chartered accountant in Bengaluru. The IT Department raided the premises of this CA, and seized bogus claim documents of his clients. There was also evidence of Whatsapp chats.
This CA helped employees of prominent IT Companies in Bengaluru, file fraudulent tax refund claims. Employees filed inflated/false claims showing loss from house property. This CA had filed nearly 1,000 fraudulent ITRs, showing loss from house property. He has cheated the Income Tax Department to the tune of Rs 18 Crores.
Employees of prominent Companies like IBM, Vodafone, SAP Labs, Biocon, Infosys, ICICI Bank, CISCO, Thomson Reuters India Limited among others, have also resorted to fraudulent tax refund claims. This is done by filing revised ITRs.
The Income Tax Department has strictly warned salaried employees not to resort to fraudulent ways while filing ITR, or resort to illegal ways to claim tax refunds. If they do so, they could be prosecuted or their employers would be informed and strict action taken against them.
SEE ALSO: How Salaried People Save Tax?
Salaried employees of reputed Companies have been caught under-reporting income, or even inflating the tax deductions. The IT Department has been observing this and has noted that CAs (fraudulent intermediaries), are helping these unscrupulous employees. This is a matter of serious concern.
SEE ALSO: How To Calculate Your Taxable Income?
Let’s say you have filed ITR and the IT Department has detected wrong/false information. The IT Department will treat these wrong claims as tax evasion. You could even be prosecuted. The IT Department has advised the salaried, not to fall prey to unscrupulous tax advisers and tax planners, who advise you to file fraudulent ITR claims, as this is tax evasion.
If Government or PSU employees are caught making wrong claims, the IT Department will inform the vigilance division of their workplace. Strict action will be taken against them.
The IT Department has warned tax planners and tax advisors to play within the rules. If tax advisors do not comply, ED (Enforcement Directorate) and CBI will take action against them.
Filed a fraudulent ITR and plan to escape? Think again. The Tax Department has a very good risk analysis system. This automated system doesn’t even require a human interface. This system can identify/detect fraudulent IT claims. The tax officers will thoroughly verify the details you have submitted in ITR, during tax processing. Be Wise, Get Rich.
Mr C.S.Sudheer is a management graduate. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.
Subscribe to our Youtube Channel