Many of us would remember having been scared watching the 1997 Hollywood blockbuster, I know what you did last summer.
While the mystery movie and its sequels, I still know what you did last summer and I’ll always know what you did last summer, had we scared out of our wits, it is now time to be really frightened and petrified, if you have earned income in India and have not filed your return of Income.
The Income Tax department, through its non-filer monitoring system, has identified about 13.7 million people with potential tax liabilities who have not filed their return of income.
In plain and simple words, it means, they know what you did last year.
As part of the Government’s efforts to increase the tax base, the Income Tax department has sent notices to large corporate entities, including multinational firms, to furnish details of professionals who may not be on their payroll but to whom payments have been made by them.
Such professionals who could be earning income but may not have filed their income tax returns fearing they would have to disclose their full income from all other sources, have been identified as potential tax evaders.
Not just professionals, almost every individual have been identified through a complete tax profiling, by linking their bank accounts and their financial transaction details, according to the Income Tax Department.
The department has also revealed that a preliminary examination of the data has revealed that many third-party vendors in different tax brackets have not been filing returns, while some have been inconsistent in doing so.
Setting up a target of adding 10 million tax payers in the current financial year (F.Y.2017-18), CBDT has openly declared that such measures are part of the second phase of the Income Tax Department’s Operation Clean Money, to bring those who have declared unaccounted cash and deposits after demonetisation, under the tax net.
The first phase initiated during the last financial year (F.Y.2016-17), saw an addition of 9.1 million taxpayers by the department, expanding the base to 65 million people, up from 55.9 million taxpayers during F.Y.2015-16.
To ensure that people file their return of income before the deadline date prescribed, the Government had recently amended the provisions of the Income Tax Act dealing with filing of returns, imposing a penalty or fine for not filing their return of income before the prescribed due date.
As per the new rules, people having an annual income below Rs. 5 lakhs will be liable to a penalty of Rs.1000 while those earning above this limit will have to be cough up Rs.5000 as fine, if they miss the deadline of filing their return of income.
It is not just Individuals, but even Companies and Corporates, which are under the tax scanner. Official data suggest that out of about 5 million companies registered in India; only around 6.90 lakh companies have filed their income tax returns last year. The remaining companies need to be prepared for sleepless nights henceforth.
If you have any notion that you can continue to live a tax-free life evading the Income Tax department, beware! They know what you did last year.
And if you seriously think that you can get away with it lightly, mind you, they still know what you did last year, and not just that, they’ll always know what you did last year.