Many cases were there in the past of tax evasion. To avoid tax evasion the central government and the income tax department impose penalties on the tax evaders. There are provisions of penalties or even imprisonment under the income tax act,1961. Such Tax Penalties can be avoided by seeking consultation from Chartered accountants.
PROSECUTION AND PENALTIES
The finance ministry has given the authority to income tax department to penalize the assessee whose in defaults of tax payment or when he/she doesn’t disclose their income on their income tax returns. department or authority can penalize the assessee from INR100 to the thrice of the tax evaded. There is also a provision of imprisonment of maximum 7 years if criminal-offense is established.
DEFAULT IN TAX PAYMENT
If there is the default in tax payment till prescribed due dates by the department. The jurisdictional officer can penalize the assessee as per the income tax act.To avoid these penalties the assessee should pay or deposit their advance tax or self-assessment tax as per the prescribed due dates.
DEFAULT IN FILING TAX RETURN
As per the Provisions of the Act, an assessee has to file his/her ITRs by the prescribed due dates i.e. July 31st of the relevant assessment year. If there is a default in filing the tax return then there is a provision in the Income Tax Act to impose a penalty of INR5,000 until 31st December and INR10,000 after 31st December onwards.
The assessee can avoid the above penalties by filing their income tax return by the due date with the help of Chartered Accountants.
MAINTAIN PROPER BOOKS OF ACCOUNT
The assessee can avoid tax penalties by maintaining proper books of accounts as per the provisions of the Income Tax Act,1961 i.e. 44AA. If the assessee is not opting for the presumptive income under the different sections (i.e. 44AD,44ADA,44AE) of the act. Then he/she is liable to maintain proper books of accounts.
The assessee can hire top accounting firms in India, which can help you to maintain proper books of account.
DISCLOSE PROPER INCOME
According to the Income Tax Act,1961 there is the penalty provision of 50% on the undisclosed income if the assessee doesn’t disclose his/her proper income on their income tax return.
TAX DEDUCTED AT SOURCE
If the assessee is liable to deduct T.D.S. (Tax deducted at source) then he/she should deposit that amount within the prescribed due dates i.e. 7th of the next month.
PENALTY FOR RECEIPT IN CASH FOR INR2 LACS OR MORE
A new section has been inserted i.e. section 269ST of Finance Act,2017 with effect from 01/04/2017 that no one shall receive any amount of INR2 lacs or more:
1. In aggregate from a person on a particular day.
2. In the account of a particular transaction.
3. In the account of transaction relevant to an event or occasion.
Other than an account payee cheque/ DD or any electronic clearing system.
If a person is in the receipt of INR2 lacs or more then the recipient has to pay the penalty equal to the amount received.