Income Tax Returns
Fine for income concealment to go up to 15pc
The Finance Bill 2014 has proposed to increase the penalty for concealment of income by the taxpayers by 50 per cent to encourage them to declare the actual income in their tax returns. Officials of the National Board of Revenue said that taxpayers would have to pay the penalty at the rate of 15 per cent instead of the existing 10 per cent per year if they concealed any income in any way in the income tax returns.
Taxpayers will also be imposed an additional 15 per cent penalty for each year if the income remained hidden.
The penalty will be imposed on taxes derived from the income which the taxpayer had hidden, they said.
The NBR proposed the increase of the penalty in the finance bill through amending Article 128 of the Income Tax Ordinace-1984.
Taxpayers who conceal income through understating the value of any immovable property in sale or transfer to evade taxes will also have to pay the penalty.
Taxpayers will have to pay the increased penalty from the coming fiscal year of 2014-15 if the proposal is passed in the parliament.
Officials said that earlier the rate of penalty was much higher but in 2009 the rate of penalty was reduced to 10 per cent.
Revenue board thinks that the rate should be increased to prevent taxpayers from unlawful practices like concealment of income to evade taxes.
The rate of penalty should be higher in line with the time value of money as the taxpayers gain benefit using the evaded tax money and depriving the government, they said.
The penalty will be imposed if the taxpayers conceal particulars of his income or furnish inaccurate particulars of such income, hide any receipt which is liable to be taxed and show any expenditure which
actually is not eligible for deduction, according to the income tax ordinance.
Deputy commissioner of taxes, appellate joint commissioner, appeal commissioner and appellate tribunal can impose the penalty at any proceedings related to the assessment if the concealment is detected.
-With New Age input
