Common Mistakes That Could Attract 200% Income Tax Penalty
Any concealment of income or under-reporting of income to evade tax can cost you dearly. The tracking mechanism of the income tax department has improved significantly in recent years. Now, you have to report your permanent account number (PAN) for all major transactions. Financial institutions with which you deal with like your bank, mutual fund company or credit card company feed the tax department with information regarding your transactions. The penalty in case of concealment and under-reporting of income can be as high as 200 per cent. "If you under-report income or don't report some of your income, you may receive notice from the tax department questioning the reason behind it. A penalty will be charged as per the tax laws," says Preeti Khurana, chief editor of Cleartax portal. According to tax experts, these are some of the income people generally don't declare to the tax authorities. 1) Gains or return on investment made in the name of spouse or mi