How are Income Tax Raids planned!!!
Posted on: 18/Feb/2020 4:52:05 PM
Most of us regularly watch and learn from TV programmes such as ‘Thozhil Ellam Sugame’ regarding Tax details, bank loans, government subsidies, etc! Those who have experienced Income Tax enquiries realise better about the importance of the amounts shown in the filed Income Tax Returns!
Yes! IT raids are sensational news! Let us know more about! We have seen on the breaking news’ video clips about the IT Raids conducted on the premises of celebrity film personnel, large commercial institutions, political leaders, famous industry owners, etc.!
Details will be presented showing bundles of currency notes, loads of documents, kgs of gold, etc., just as shown in James Bond movies! However, what happens in a real Income Tax Raid?
Tax Evasion Enquiry
Generally, as avenues of paying less income tax, 3 avenues can be categorised planning tax payment, avoiding paying IT, and cheating paying IT.
Out of these, in case the 1st 2 avenues Tax Planning and Tax non-payment are proved wrong, the offender has to pay, by maximum punishment, the amount to be paid as penalty, interest etc. However, as for the 3rd category of cheating paying Income Tax will be subjected to raid and enquiry! With this, the details of au unaccounted income, how these unaccounted assets were accumulated etc., will be checked and found.
Regarding IT raids, there is a general complaint that they are conducted as guided/ordered/commanded by the central government!
However, the reality is that raids are not conducted based just on rumours or hearsay! Only after a thorough check of related documents, the background details, the IT officials conduct raids!
Is ‘Cinema Raid’ real?
It is possible for the IT department to conduct raids anywhere in India, any time, on the persons/parties who have accumulated more wealth than shown on IT filing!
One thing is clear the true IT rais is not like anything shown in movies with sequences such as rows of cars arriving at the raid premises, breaking the room walls, digging the floors, finding treasures shored in the roof lofts taking out bundles of currencies. Jewellery items, and bond papers!
There are preconditions before conducting any raids related document preparation, enquiry on the taxes as per records, prior approval from the IT Director and then only raids are planned and carried out as per the different locations (at the same time) detailed from the findings!
How is the raid conducted?
The Income Tax officials would identify themselves to the relevant persons by showing their ID cards. The person can check whether these visiting IT officials have the relevant warrant, etc. If there are any doubts, he/she has the right to call the Income Tax Department and enquire the particulars.
Further, the raided persons will be allowed to be present during the raid and also have their food and medical attention, if required. They would also be allowed to present any related documents.
The children going to schools will be allowed to leave after a check of their bags. All women will be checked only by women officials.
Who orders raid?
As per the Income Tax Law Act 132 Section 1, the IT officials will undertake the raid based on the orders from an official equivalent in designation to the Chief Commissioner.
The officials have the authority to check anything anywhere residence, office, vehicle, etc.! The raiding officials will cut off all telephone and mobile connections before commencing the raid!
No confiscation!
Generally, the raiding officials will check whether jewellery items, cash, bonds, costly painting art, etc have been shown in the IT return filed. Only after this check, the unaccounted money will be confiscated. Out of the unshown jewellery, unmarried women are allowed to have 150 grams of gold and the men, 100 grams.
In case it is found that the key for the room or safety locker is not available, the raiding officials have the right to break them open.
Items such as Fixed Assets, Commercial items, properties and jewellery items which have been accounted for cannot be confiscated.
Why raids are conducted on film actors?
In case the person under rais shows that the unaccounted details are in the name of a 3rd person, the raiding authorities do have the right to check the same! In a recent rais conducted at the office/premises of a film financier, the name of a popular actor was also being referred. This is why there are prospects of the raid on him as well! However, this type of raid will be conducted only on issues related to controversial news exchange from the raided!
360 Degree which assists the raid!
Adopting the latest advanced technology, the IT Department nowadays gathers data using various avenues! For example, in a new technique ‘360 degrees data collection’, all ininvestments and expenditures are collected. These gathered data are compared with the data from IT file returns. In case the unaccounted property is excessive, the concerned details are immediately gathered.
Following certain changes in IT Acts a few years ago, there is no necessity to inform even the courts as to why the IT raid is being conducted! In case there are prospects for doubts, the raiding officials have the right to check them. The details received by the Income Tax Department on this is mostly from rumours and 3rd parties!
The persons who provide clear and accurate data are even rewarded by the Income Tax Department with prizes! The details regarding this information provider are kept strictly confidential.
In the present situation, the unaccounted cash and properties are always risks! In the case of information reaches, the Income Tax department can take action at any time!
The business entrepreneurs who planned to expand their business can avail the concession announced by the IT Department in this regard and pay fewer taxes and if the taxpayer shows all the property and cash to the IT authorities, it would all be peaceful day and night!
