Ahead of the tax return filing deadline later this month, the Income Tax Department has recently issued a strong advisory to taxpayers, warning against the submission of income tax returns (ITRs) with inaccurate claims for exemptions and deductions. CAclubindia reported that authorities highlighted the severe consequences associated with such actions, including hefty fines and potential imprisonment.
The I-T Department in a joint initiative with the South Central Railway (SCR) organised an 'Outreach Awareness Programme' in Vijayawada. The primary objective of the event was to educate employees about the importance of accurate tax filings. The initiative sought to provide essential information on tax compliance to empower individuals to handle their tax matters responsibly. The program also aimed to discourage employees from relying on intermediaries who might engage in fraudulent practices by submitting false claims on their behalf.
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At the programme as the chief guest, Vijayawada Divisional Railway Manager (DRM) Narendra A. Patil said many employees were filing their I-T returns through middlemen or chartered accountants by submitting all details to them.
"If the middlemen misguide us and file returns with false claims, you (the assessee) will land in trouble,” he said.
He also encouraged employees to take the time to educate themselves on tax regulations and file their returns on their own to steer clear of any possible legal complications.
At the programme, Joint Commissioner of Income Tax, N. Abhinaya, highlighted that in the fiscal years 2022-23 and 2023-24, numerous salaried workers had submitted inaccurate claims. She said that there would be serious repercussions for incorrect deductions. False claims would result in a 200% penalty and possible imprisonment.
“During our verification in Andhra Pradesh and Telangana, a large number of assesses have been found to have filed incorrect exemptions and deductions and claimed huge returns,” she said.
“It was noticed that the employees claimed huge refunds which resulted in action against the consultants and intermediaries for the malpractice and fraudulent claims,” the Joint Commissioner said.
Penalty for not filing ITR
It is to be noted that all taxpayers, especially salaried individuals, are required to submit their Income tax returns for the income they have earned up to 31st July of the assessment year (AY) corresponding to the financial year, unless there is an extension granted.
Each Assessment Year (this is AY2024-25), the government allows a four-month timeframe for taxpayers to organize their income information for the respective financial year and proceed with the filing of income tax returns. This specified period commences on 1st April and concludes on 31st July, unless there is an extension provided.
If your ITR is filed after the due date of 31st July 2024 but before 31st December 2024, a maximum penalty of Rs 5,000 will be imposed. Small taxpayers, with a total income not exceeding Rs 5 lakh, will face a maximum penalty of Rs 1,000 for the delay. Those whose total income does not exceed the basic exemption limit will not be charged any penalty.
Penalty for underreporting, tax evasion in ITR
Tax planning, tax avoidance, and tax evasion are concepts delineated under the Chapter XXII of the Income-tax Act of 1961. This legislation imposes stringent penalties on individuals engaging in tax evasion, with fines reaching up to 300% of the tax due on undisclosed income. Therefore, it is strongly advised to fulfill your tax obligations in a timely manner to avoid potential legal and financial ramifications.