Direct Taxes Code proposes to plug loopholes in tax evasion
Press Trust of India / New Delhi Aug 16, 2009, 20:02 IST
Evading taxes would be tougher as the new Direct Taxes Code proposes to take away the powers from any tax authority to waive penalty, even as it reduces the amount of such fine to twice the tax liability against thrice at present.
"Every person who willfully under-reports his tax-base shall be liable to a penalty not less than and up to twice, the amount of tax payable in respect of the amount of tax base so under-reported," the draft code said.
Currently, the penalty is up to thrice the value of the tax liability.
However, the code proposes to impose penalty on those who "willfully under-report tax base".
Willful under-reporting would include not filing of tax returns by due date and reporting less taxable income in the returns than the actual.
The penalty imposed cannot be waived by any tax authority, the code has proposed. Currently, the Commissioner of Income Tax has the power to waive the penalty.
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