Steer Clear Of Tax Evasion And Ignorance Of Tax Laws To Avoid Trouble With The Taxman

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MakeMyReturns.com is a portal that has been developed by a team of Tax Experts that are considered among the most experienced in India. Together, this highly experienced and knowledgeable team has created specialized packages that assist in the Electronic Filing of Income Tax Returns that are required to be filed on the official website of the Income Tax Department of India.

Mumbai, Maharashtra, India., February 21, 2013 - (PressReleasePoint) - The Income Tax Department of India allows taxpayers to formulate their own tax payments and though this does serve as freedom to the citizens of the country, it does not in any way indicate that tax laws can be ignored. Tax evasion is considered a serious offence and one should always try to avoid such pitfalls, whether it is due to ignorance or deliberate.Tax evasion is considered a serious crime in most countries and so is the case in India. The term tax evasion translates into a failure in filing income tax returns altogether and declaring the wrong amount of income or hiding income in order to save on taxes. The term tax evasion is different from the term tax avoidance where tax laws contribute to tax savings in a legal manner.

The scrutiny of Income Tax Returns takes place when an Income Tax authority realizes that there is a possibility of tax evasion in relation to a certain tax return. If tax evasion is proven, guilty taxpayers are liable to pay a penalty up to three times the amount evaded. The mental stress that one has to go through during the scrutiny is yet another factor hinting that it is better to be aware of tax laws and how these laws work.

Scrutiny of Income
In the event that a particular tax return is discrepant, the Assessing Officer initiates the process of scrutiny of income. There are three basic steps involved in this process. The first is when the Assessing Officer finds a discrepancy and asks for the relevant documents of the taxpayer such as Form 16, bank statements, credit card details, financial details of other members in the family etc.The second is when a notice summoning the taxpayer for scrutiny is sent. This notice can be sent to the taxpayer any time within one year of the taxpayer filing the income tax returns. The third step is when the taxpayer appears before the Assessing Officer on the date and time mentioned in the notice sent by the Income Tax Department. Here the taxpayer has the choice of either appearing himself or sending over a representative, usually his Chartered Accountant.

Criteria for choosing a tax return for scrutiny
 Eventually, honesty as well as awareness of tax laws are the only two components that make for a correct Income Tax Return, thus saving taxpayers from the embarrassment, mental agony, and subsequent penalty that comes along with a tax return scrutiny.
There are a number of criteria that can contribute in making a particular income tax return liable for scrutiny. The following cases are the most common among them.

• When the returns filed are related to Search and Seizure cases
• When the returns filed claim a deduction of RS. 25 lakh and above under Chapter VI-A of the Income Tax Act of 1961
• When the returns claim a refund in excess of Rs. 5 lakh
• When only Rs. 50000 has been withdrawn from the taxpayers bank account in the course of the year
• A Computer Assisted Scrutiny System (CASS) also helps choose scrutiny cases based on a particular set of instructions pertaining to different criteria
• Repercussion of a Scrutiny of Income

In the event of the taxpayer being proven guilty of tax evasion by the Assessing Officer’s scrutiny of tax returns and the subsequent interaction with the taxpayer or the taxpayer’s CA, a penalty is levied on the taxpayer. This penalty could range up to three times the amount of income on which the relevant tax was not paid.

Tips to avoid tax scrutiny while filing Income Tax Returns
The best way to avoid the mental torture that comes along with a tax returns scrutiny is to ensure that the income tax returns filed are honest and correct in every way. If there is no discrepancy in the tax returns, the Assessing Officer will not find the need for initiating the scrutiny process.Salaried individuals can take certain precautions so that they stay away from this agonizing process. Since the taxes on their salary is deducted at source, they assume that this is the case with their other sources of income as well. However, proper tax calculations need to be done as per the required tax laws in order to file a clean tax return. In the event of a change in jobs too, the TDS needs to be calculated with both the old as well as the new organization before deciding if taxes are required to be paid. Overall, it is eventually the responsibility of the taxpayer to file correct returns and furnish the correct details of income. This and awareness of the existing and updated tax laws help in avoiding tax scrutiny.

Mr. Aashish Ramchand, Chief Executive Officer of MakeMyReturns.com, a leading Tax Help portal in India, threw some light on the issue of tax evasion saying, “Tax evasion is a crime punishable under the law and should be kept abreast of. It is imperative that people are aware of their tax obligations and responsibilities. I use such words as individuals tax cases may get picked up due to their lack of knowledge of Indian taxes or lack of interest in their taxes.”Mr. Ramchand also gave a few pointers that will help taxpayers avoid the dreaded process of a scrutiny from an Assessment Officer. He said, “To avoid cases being picked for scrutiny the taxpayer should know certain parameters by which the tax department scrutinizes cases such as investments in MF above 5 lakh, investment in property over 30 lakh, payment of annual credit card expenses over Rs. 2 lakh etc. Besides this, there are other points on which the tax department may pick up cases so it is inherently important for the taxpayer to be vigilant of his taxes. Once he does this he will not get the dreaded notice from the Taxman.”Eventually, honesty as well as awareness of tax laws are the only two components that make for a correct Income Tax Return, thus saving taxpayers from the embarrassment, mental agony, and subsequent penalty that comes along with a tax return scrutiny.

About Make My Returns
MakeMyReturns.com is a portal that has been developed by a team of Tax Experts that are considered among the most experienced in India. Together, this highly experienced and knowledgeable team has created specialized packages that assist in the Electronic Filing of Income Tax Returns that are required to be filed on the official website of the Income Tax Department of India. Apart from this, taxpayers can also approach the portal for personalized solutions to their own taxation difficulties.


For More Information, Please Contact:
Aashish Ramchand
Contact No. : 022-66121000
mail id : connect@makemyreturns.com
Company Name : Makemyreturns.com
Company url : http://www.makemyreturns.com/

Finance, Mumbai