Post by congregatio on Jan 16, 2015 1:26:49 GMT 4
It time for preparing income tax returns and filing in India. Here are some items that require mandatory disclosure:
foreign bank accounts, including peak balance during the year;
quantum of investment in any entity outside of India;
immovable properties situated outside India, including total investment therein;
any other asset in the nature of investment; and
trusts created outside of India, either in the capacity of a trustee, beneficiary or settlor.
It is important to note that disclosure is entirely separate from taxability, and the above, in many cases, could be a mere information-gathering exercise by the Indian income tax authorities.
A number of deterrents are built into India's domestic tax law to discourage noncompliance with the return filing requirements:
interest is chargeable at a rate of 1 percent for each month or part of a month for which a return is filed late;
a penalty is imposed if a return is not filed on or before the last day of the financial year in which the return-filing due date falls; and
a penalty is imposed at a rate of 100 percent to 300 percent of the tax sought to be evaded for concealment of income.
The penalties are imposed at the discretion of the tax authorities. The defaulter is also exposed to the risk of prosecution and imprisonment for a term ranging from six months to seven years. Given the current investigations into overseas "black money," a number of international financial intermediaries like banks, trust companies and others have been brought under the investigative machinery to obtain information under the possibility of being proceeded against as wilful abettors.
If you have any questions about the above, please contact legal or tax counsel. The above is not complete and no advise (neither legal nor tax nor business)
foreign bank accounts, including peak balance during the year;
quantum of investment in any entity outside of India;
immovable properties situated outside India, including total investment therein;
any other asset in the nature of investment; and
trusts created outside of India, either in the capacity of a trustee, beneficiary or settlor.
It is important to note that disclosure is entirely separate from taxability, and the above, in many cases, could be a mere information-gathering exercise by the Indian income tax authorities.
A number of deterrents are built into India's domestic tax law to discourage noncompliance with the return filing requirements:
interest is chargeable at a rate of 1 percent for each month or part of a month for which a return is filed late;
a penalty is imposed if a return is not filed on or before the last day of the financial year in which the return-filing due date falls; and
a penalty is imposed at a rate of 100 percent to 300 percent of the tax sought to be evaded for concealment of income.
The penalties are imposed at the discretion of the tax authorities. The defaulter is also exposed to the risk of prosecution and imprisonment for a term ranging from six months to seven years. Given the current investigations into overseas "black money," a number of international financial intermediaries like banks, trust companies and others have been brought under the investigative machinery to obtain information under the possibility of being proceeded against as wilful abettors.
If you have any questions about the above, please contact legal or tax counsel. The above is not complete and no advise (neither legal nor tax nor business)