The task of combating tax evasion and checking the proliferation of black money is a daunting one. The government has, however, been continuously striving to eradicate the menace. Towards this objective, various steps have been taken by the Income Tax Department from time to time.
The policy being followed is a two-pronged one. On the one hand, measures have been taken to encourage voluntary compliance and, on the other hand, tax evasion is being sternly dealt with. The department has gradually strengthened the enforcement machinery so that evaders are not able to get away. The ultimate objective is to create effective deterrence against tax evasion so that there is an environment of voluntary compliance.
In the last few years, various administrative and legislative measures have been taken by the government for creating a tax payer friendly environment and encouraging voluntary payment of taxes. Briefly these are:
• The tax rates have been greatly lowered.
• The tax laws have been simplified and the exercise to further simplify them is on.
• There is greater emphasis on better tax payer services.
• More and more faith is being reposed on the tax payers as most of the returns are being accepted without scrutiny.
• Irocedures are being simplified and streamlined.
• Interface of the public with the tax officials has been reduced to the minimum.
• E-filing and e-processing of returns have been introduced.
• Greater transparency in tax administration is being brought in.
All these measures are aimed at reducing the people’s tax burden and creating greater faith between the Income Tax Department and the tax paying public so that the tax payers comply with tax laws voluntarily and pay the due taxes. The tax payer is no longer considered an adversary of the department.
It is also a fact however, that unless people are aware that their activities cannot remain hidden forever and the authorities are fully capable of catching the evaders and punishing them, voluntary compliance will remain only a concept and would not become a reality. The good news is that the Income Tax Department is very well-equipped to investigate and detect tax evasion and take action against the culprits. This book is an attempt to explain what is the investigation machinery of the department, what are their powers, how they catch the tax evaders and what are the consequences that follow, when one is caught. It is also to be understood that law-abiding citizens have nothing to fear. If you honestly comply and pay your taxes, there is nothing to be afraid of.
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