Thursday, September 19, 2024
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Tax fraud by N-E salaried people on the rise

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Guwahati: An increasing number of tax fraud by salaried people were detected in the Northeastern region, particularly in Manipur, said R K Gupta, Chief Commissioner of Income Tax, NER.

These frauds were often related to claims under various sections of the Income Tax Act, 1961, like 80G (donation to charitable institutions), Gupta told reporters.

“It has come to our notice that certain employees claim as much as 60 per cent of their gross salary income as deduction u/s 80GGA/80G…a situation clearly not possible,” the chief commissioner said.

Urging the salaried people to restrain themselves from resorting to such unlawful practices, he said this may result in penalty upto 300 per cent and prosecution, including termination of service, Gupta warned.

Giving an opportunity to those making incorrect claims, he appealed to all salaried employees to come forward and file revised return to avoid punitive action.

Gupta also said exemption of Income Tax for Scheduled Tribes people was admissible only under certain conditions in the North-East region.

“There are many cases of Scheduled Tribes in the NER claiming exemption running into crores of rupees. They avail exemption from taxation under 10(26) of the Income Tax Act”, he said.

“Under 10(26) of the Income Tax Act a claimant should be a Scheduled Tribe of a specified area. He/she should be resident of that area and his/her income should be from that area except dividend and interest income”, he said.

These areas are N C Hills, Karbi Anglong and Bodoland Territorial Administrative Districts (BTAD) in Assam, Khasi Hills and Garo Hills in Meghalaya, Arunachal Pradesh, Manipur, Mizoram, Nagaland, Tripura and Ladakh, Gupta said.

“There are deposits in banks in crores in the name of members of the ST community. The persons are not residing in that area and the area does not have potential to generate that type of income,” the I-T official said.

“There is also a general wrong perception that in the case of ST no inquiry or details can be asked for. This is wrong. The claimant is required to prove that he has earned the income from the specified area”, Gupta said.

Stating all claims under section 10(26) must be verifiable with respect to the legal conditions, he said, the claimant should be in a position to produce the required documents. “If the turnover of business exceeded Rs 60 lakh and the professional receipts exceeded Rs 15 lakh, Gupta said, the claimant should maintain the books of accounts/documents and get them audited under section 44AB.

Cases not falling in this category should also keep documents/other evidence establishing their income. (PTI)

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