Under-reporting income or inflating deductions/exemptions in income tax return can attract heavy penalties ranging from 50% to 200% of tax evaded, say experts. An advisory issued yesterday by the income tax department has warned salaried tax payers against trying to evade tax by indulging in these malpractices and pointed out that these would attract penalties as per law. As per Section 270A, if income is under-reported on account of misreporting of income then penalty shall be leviable at the rate of 200% of tax payable on under-reported income. However, if income is under-reported due to any other case, the penalty shall be 50% of tax payable on under-reported income. Clearly, the tax department is asking for detailed disclosures now in order to catch under/misreporting of income by salaried tax payers.The racket detected by the income tax department recently in Bengaluru was one of fraudulent claim of tax refunds by salaried employees.

Source: Economic Times April 19, 2018 08:42 UTC