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  1. Income Tax Return filing 2018: Salaried taxpayers, this Bengaluru case turned IT dept’s eyes on you

Income Tax Return filing 2018: Salaried taxpayers, this Bengaluru case turned IT dept’s eyes on you

Income Tax Return filing 2018: The Income Tax department has warned salaried class taxpayers against using illegal means while filing their returns. The illegal means include under-reporting of income, or inflating deductions etc.

By: | New Delhi | Updated: April 19, 2018 6:36 PM
income tax refund filing requirements Income Tax Return filing 2018: In January itself, the IT department had cautioned salaried taxpayers from taking to fraudulent means for refund claims.

Income Tax Return filing 2018: The Income Tax department has warned salaried class taxpayers against using illegal means while filing their returns. These illegal means include under-reporting of income, or inflating deductions etc. You may be prosecuted if found taking to these means. Not just this, the IT department will ask your employers to take action against you.

In a “cautionary advisory”, the Central Processing Centre (CPC) has cautioned taxpayers not to “fall prey” to tax advisors or planners who help in preparing wrong claims. The development that acted as the trigger for the IT department’s advisory was reports of tax evasion by under-reporting of income or inflating deductions or exemptions by salaried taxpayers early this year.

The Bengaluru case

In January this year, IT sleuths had exposed a racket that operated in alleged connivance with a tax advisor Chartered Accountant (CA) to extract fraudulent tax refunds for staff of some of the top Bengaluru-based IT companies including IBM, Vodafone and Infosys.

On January 24, IT department’s investigation wing had claimed that they had “seized” bogus claim documents of several clients, including their WhatsApp messages, during a raid on the premises of an unidentified CA.

The investigation wing officials had then said the CA was helping clients file false Income Tax Returns and make illegal refund claims by citing inflated or false claim of loss from house property, PTI had reported.

The raid on the CA’s premises led to several surprising revelations and steps by the IT department. These included:

  • The said CA had filed around 1000 returns with a loss from house property. The aggregate of loss claim was Rs 18 crore till then.
  • Employees of over 50 Bengaluru-based companies were under the scanner. All of these employees were clients of the said CA.
  •  The IT department revealed that some of the 50 employees under scanner also belonged to top companies like BM, Vodafone, Saplabs, Biocon, Infosys, ICICI Bank, CISCO, Thomson Reuters India Limited.
  • When quizzed by IT department, many of the employees under scanner had said that they didn’t have any “real loss” under the “income from house property”. They blamed the CA, alleging the latter had advised them the illegal move for getting refunds. They further alleged that the CA had charged 10 percent as “incidental charges” from them.
  • The CA, however, said he had filed illegal refunds claim at the “insistence of his clients”.

Caution

In January itself, the IT department had cautioned salaried taxpayers not to take to fraudulent means for refund claims and also warned them against indulging or getting influenced by such frauds.

In the recent advisory, the IT department said, “Taxpayers, are, therefore strictly advised not to fall prey to false promises or mis-advice by unscrupulous intermediaries and submit wrong claims in their ITRs, which would be treated as cases of tax evasion.”

“In the cases of such wrong claims by the government/PSU employees, reference would be made to the concerned vigilance division for action under conduct rules,” the IT department added.

The department has also asked tax advisors to confine their suggestion to clients within the ambit of the IT Act.

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