Invest in Credit Risk Mutual Fund or not?

There is no undo if, as a taxpayer, you have already evaded the tax. The penalty for tax evasion varies depending on the type of fraud committed and the amount of tax that has not been paid. For instance, although the income tax filing date has been extended by 31 December 2021, not filing it might attract a penalty.

Here are some scenarios and the punishments that may be imposed in each case:

All taxpayers must file their income tax return during the tax filing period for each financial year, according to subsection (1) of Section 139 of the Income Tax Act of 1961.

-Anyone who fails to file their income tax return for any reason is subject to a Rs 5,000 penalty. In some situations, the assessing officer can also determine the penalty’s value, which can be less than or equal Rs 5,000.

-At the time of hiring, most firms request the employee’s pan card number. This information is needed to calculate TDS from an employee’s salary. The employer will deduct 20% TDS instead of 10% TDS if the employee does not have a pan card number.

-If the reason for the under-reporting was a genuine mistake, a penalty of 50% is imposed on the amount of income that was hidden or understated. This is a real error that was not made with the intent of evading taxes. If the mistake was made on purpose to escape taxation, a penalty of 200% is imposed on the amount of income that was hidden or understated.

– If there are discrepancies in the income tax return, the income tax department may issue a demand notice. If this occurs, the IT department will send a demand notice detailing the amount of tax that remains unpaid. The taxpayer has 30 days from the date of receipt of the document to respond to the demand notice. A penalty may be imposed if you do not answer and pay the tax owing.

– If a company fails to have itself audited or submit an audit report as required by Section 44AB, they must pay a penalty of either Rs 1.5 lakhs or 0.5% of their annual sales turnover, whichever is greater.

These are just a few of the penalties that the Income Tax Department can levy, and they can be quite costly in some situations, so the best thing to do is make sure that all taxes are paid on time.