“Central Board of Direct Taxes has launched an automated dedicated e-portal on the e-filing website of the Department to receive and process complaints of tax evasion, foreign undisclosed assets as well as complaints regarding benami properties”
Taking another step towards e-governance and encouraging participation of citizen as stakeholders in curbing tax evasion, the Central Board of Direct Taxes has launched an automated dedicated e-portal on the e-filing website of the Department to receive and process complaints of tax evasion, foreign undisclosed assets as well as complaints regarding benami properties
Tax Evasion
Tax Evasion is an activity of evading tax liability by using unfair and illegal means. In simpler words, where an individual, body corporate, company or trusts deliberately tries to reduce the tax liability by treating personal expenses as business expenses, by over-stating the expenses, deductions or stating less income than the income actually earned. It is not limited only to income-tax, but also GST custom duties, etc. It is considered as fraud and criminal offence under federal laws. It attracts penalties and violator risks himself of being prosecuted.
Mostly people got confuse between Tax Avoidance and Tax Evasion; tax avoidance is a legal way of minimizing tax liability within the stipulated provisions of law standards and codes. It uses the loopholes in Tax laws for reducing the tax liability. On the other hand, tax evasion is illegal activity and involves manipulating the statement of affairs in order to minimize the tax liability.
Benami Property
Literal meaning of ‘Benami’ is ‘without any name.’ Benami Property refers to any property whether movable or not, tangible or intangible, which is purchased in the name of a person who is actually not the owner he just holds the property and consideration is paid by the some other person and such person is the real owner of such property. Person who holds such property is known as ‘Benamidar.’ The transaction becomes ‘Benami Transaction’ if the buyer fails to disclose the income at the time of purchase such property becomes ’Benami Property’. For instance, Mr X. buys a property from Mr Y and the consideration is paid by Mr Z. Mr Y only holds the property but Mr Z is the real beneficiary of the property. In the given instance, Mr Y is called as ‘Benamidar.’ In other words we can say that individual purchases the property in other person’s name. Property may be referred to as gold, legal documents, flats, etc. It is important to note that property is not said to be benami if the person is able to disclose the source of income in front of the relevant authorities. Failure to comply with the rules and provisions attracts tax liability, penalties as well as prosecution.
Foreign Undisclosed Assets
Undisclosed asset located outside India means an asset (including financial interest in any entity) located outside India, held by the assessee in his name or in respect of which he is a beneficial owner, and he has no satisfactory explanation about the source of investment in such asset or the explanation given by him in the opinion of the Assessing Officer is unsatisfactory.
“Undisclosed foreign income and asset” means the total amount of undisclosed income of an assessee from a source located outside India and the value of an undisclosed asset located outside India.
Procedure for Filing e-Complaint and Income Tax Informants Reward Scheme, 2018
The public can now file a Tax Evasion Petition through a link on the e-filing website of the Department https://www.incometaxindiaefiling.gov.in/ under the head “File complaint of tax evasion/ undisclosed foreign asset/ benami property”. The facility allows for filing of complaints by persons who are existing PAN/Aadhaar holders as well as for persons having no PAN /Aadhaar. After an OTP based validation process (mobile and/or email), the complainant can file complaints in respect of violations of the Income- tax Act, 1961, Black Money (Undisclosed Foreign Assets and Income) Imposition of Tax Act, 1961 and Prevention of Benami Transactions Act (as amended) in three separate forms designed for the purpose.
Upon successful filing of the complaint, the Department will allot a unique number to each complaint and the complainant would be able to view the status of the complaint on the Department’s website. This e-portal is yet another initiative of the Income Tax Department to bring about enhanced ease of interaction with the Department, while strengthening its resolve towards e-governance.
The Central Board of Direct Taxes will give a reward of upto Rs 5 crore to any person who provides specific information about evasion of Income Tax on income and assets in India and abroad. The informants can file complaint on a dedicated e-portal launched by the CBDT earlier this week on its e-filing website.
Under the Income Tax Informants Reward Scheme 2018, the complainant will get upto Rs 1 crore for specific information on Benami property assets, and Rs 5 crore for the tip-off on the tip-off on evasion of income tax. The identity of the informant shall be kept confidential, though furnishing false information or evidence would be considered an offence.
The quantum of the interim reward shall be one per cent of the fair market value of the immovable property, provisionally attached subject to a maximum of Rs 10 lakh, and the quantum of final reward shall be 5 percent of the aforementioned subject to a maximum of Rs 1 crore, according to a 2018 release by the Income Tax Department.
It should be noted that furnishing false information/evidence is an offence and a person giving false information/evidence/ statement will be liable to be prosecuted for such offence.