At the end of every financial year, many taxpayers make investments to minimise taxes, without adequate knowledge of the various available options.
Tax evasion is not a modern concept since it traces its origins back to when the concept of taxation emerged in Kautilya’s book ‘Arthashastra’ which refers to different types of taxes and punishments as a countermeasure for evading them.
Low tax compliance is a matter of serious concern in developing countries, limiting the capacity of their governments to raise revenues for developmental purposes.
The Income Tax Act provides that losses can be carried forward only if the return has been filed within the time prescribed under the Act.
In order to address the issue of black money, the government banned cash transactions of Rs 2 lakh and above starting April 1, 2017. Any amount over Rs 2 lakh will have to be paid by account payee cheque, bank draft or electronic bank transfer.
One should put the various tax deductions, benefits and exemptions to best use to minimise tax liability. Year-end tax planning strains finances if decisions are made in a hurry.
Insolvency is a state or condition of a person who is unable to pay his debts.
The financial year is almost coming to its end and many investors will seek various avenues in order to save taxes.
DEMONETISATION of high-value currency notes was done to clamp down on black money, among other things. As a fallout of this decision, focus also shifted to urging people to move towards cashless transactions.
While finance minister Arun Jaitley duly recognised the contribution of the salaried class to tax revenues in his Budget speech, he did not do much to meet their expectations.
The income tax department is sitting on voluminous data collected by banks and financial institutions after the demoneti- sation drive.
Demonetisation will have its share of benefits for the economy, apart from boosting government coffers.
TAX smart cash hoarders may feel that there are ways and means of playing around with the provision of law to evade taxes and go scot free even after demonetisation.
The government passed the Black Money Act to nab those with undisclosed foreign income, then offered income declaration schemes, and then demonetisation.
With a huge amount of money flowing into the banking system after demonetisation, the government has tightened its grip on tax evaders. It has now given people with black money a last chance to come clean by availing the Pradhan Mantri Garib Kalyan Yojana (PMGKY).
Impact of demonetisation shall be different for those with tax-paid cash savings and those dealing in black money
In order to reduce the quantum of cash transaction in any goods and services, the Finance Act 2016 expanded the scope of section 206C to provide that a seller shall collect tax at the rate of 1% from the purchaser on sale in cash of any goods (other than bullion and jewellery) or providing of any services exceeding Rs 2 lakh.
Over the years, the format of the income-tax return has evolved and the forms available today provide for declaration of exempt income, foreign assets, foreign tax credits etc.
Taxes withheld on salaries is based on the investment declaration filed by the employee at the start of the year.
It would be worthwhile to look at the list of possible tax-saving avenues which could be resorted to by the salaried class to minimise the tax outflow.
Budget 2016 proposal on EPF withdrawl tax will affect the youth most and may discourage them to save for their retirement.
Any law or directive that seeks to rein in black money should be innovative and radical enough to effect major evolutionary changes.
Recent initiatives taken by the government conveys the message that it will improve the tax administration by making the system simple and technology-driven.
The Budget has proposed that if the amount of premature withdrawal from the Employees’ Provident Fund exceeds Rs 30,000, tax at 10% will be deducted. If PAN details are not furnished, tax at 30% will be deducted.