Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: empanelment :: articles on VAT and GST in India :: TDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: list of goods taxed at 4% :: due date for vat payment :: form 3cd :: VAT Audit :: ACCOUNTING STANDARDS :: Central Excise rule to resale the machines to a new company :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARD :: VAT RATES :: cpt
 
 
« General »
 India's tax department signs 3 advance pricing agreements
 Income Tax Dept to probe deeper into suspicious bank accounts
 Modi may lower taxes to spur demand in his budget sops
 Tax breather for foreign investors: All you need to know
 What the increase in tax collections does not tell us about Indian economy post demonetisation
 India’s crazy retrospective tax on foreign funds will tarnish country’s reputation
 How tax related, PAN grievances can be resolved through E-Nivaran
 Tackling income tax exemptions for equities and agriculture
 Amfi wants tax benefits for retirement plans
 Top five factors which could chart market direction in the coming week
 Tax rate hikes boost shadow economy

Tax officials are using an IDS provision to question transactions beyond six-year-limit
October, 12th 2016

Income tax officials are said to be asking questions about transactions older than the six-year statute of limitations by invoking a provision that was put in place as part of the just-concluded Income Disclosure Scheme (IDS), throwing assessees into turmoil.

While no fresh notices are being issued on such assets, some income tax officials believe the IDS-related provision allows them to raise such matters when they conduct assessments of returns made within the six-year ceiling. “It’s not an unlimited power for the income tax department to go after whomsoever they want to go,” a tax official told ET.

“But tax officers can raise questions under ongoing assessments, even about properties bought say 20 years ago and source of income.” Section 197c, which was recently added to the Finance Act, allows tax officials to examine transactions much older than six years.

This was believed to have been solely related to IDS--the June-September programme aimed at persuading people to declare their black money holdings--but the tax department has in the past week begun questioning people about properties older than six years in some ongoing assessments.

“The government had introduced section 197c for the IDS, but now the concern is whether tax officials can still open assessments which are older than six years,” said Sanjay Sanghvi, tax partner at law firm Khaitan and Co.

“There is a view that the tax officials can do that, but this could lead to a lot of litigations going ahead as it contradicts provisions of Income Tax Act.” One instance relates to the New Delhi income tax department last week asking a tax payer for documents related to a house that was purchased more than six years ago.

Tax officials are using an IDS provision to question transactions beyond six-year-limit

The officials said it would be included in the past year’s income and penalties would be imposed, according to a tax adviser who was involved. “It’s a damaging provision of IDS which allows IT officers to go back several years to catch undisclosed income and deem it as current year’s income. This is not limited by time given under the income tax provisions,” said Amit Maheshwari, partner at Ashok Maheshwari and Associates.

It couldn’t be independently verified whether this was a view held by the department or just a few tax officers. ET also understands that income tax officers had raised the matter with the Central Board of Direct Taxed (CBDT) in July, with some making the point that litigation could follow as other regulations still bar assessments older than six years.

To be sure, Prime Minister Narendra Modi has made it clear to tax officials that they shouldn’t unnecessarily harass bonafide tax payers and encourage voluntary compliance.

“The government has not come out with clear regulations around using this provision but the thinking could be to go hard at the tax evaders,” another person close to the development said. Experts said some tax payers are worried their ancestral properties may also come under the tax net.

They wouldn’t have been too encouraged by the statement of a top government minister at a public event in Mumbai about a month back. “You want to enjoy the ancestral property but you don’t want to pay taxes on that. How can that happen?”

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Careers

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions