Page 39 - Seniors Today Febuary 2020
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So, the Government is probably going to There are already penalties provided
earn much more tax than what it says it is for in the Income Tax Act, for numerous
foregoing! contraventions. An additional provision now
will be section 271AAC.
Non-residents This will state that if it is found that in the
A person who is Non-Resident of India, on books of account maintained by any person,
the basis of the number of days, as specified there is a false entry or an omission of any
in the Income Tax Act, is liable to pay tax in entry which is relevant for computation
India on the income earned in India but not of total income of such person to evade
on the income earned outside India. tax liability, then a penalty of 100% of the
An amendment to this well established amount of the false or omitted entry can be
position was proposed, and this shocked charged. The penalty will not be only with
many Non-Residents. The amendment reference to the income-tax arising out of
proposed was that if an Indian Citizen such transactions but to the full amount of
is Non-Resident and is not liable to tax such transactions or entries.
overseas on account of his residence or Accordingly every assessee must be very
domicile outside India, then he would be careful and even an inadvertent mistake or
deemed to be Resident and would be taxed omission can lead to huge penalties.
on his world income.
A large member of Indians live in the Charitable trusts
Middle East, where there is no Income- Even though a Charitable Trust may
tax. All these persons would suddenly be have ahead been registered with the IT
deemed to be Resident and would be taxable Department under section 12A or section
in India on their world income, even if do not 12AA, it will now have to register again,
spend a single day in India, and even though under section 12AB, and the application
the income has no connection with India! must be submitted by 31.8.2020.
Shakespeare’s Hamlet’s question was “To
be or not to be”. The question of NRIs now Vivad Se Vishwas
is “To be or not to be – an Indian Citizen”! Although there are many more amendments
Many actually have stated that they wish to proposed, let us end on a positive note!
give up Indian Citizenship rather than have A new law called “the Direct Tax Vivad Se
to face laws such as these. Vishwas Act, 2020” is to be passed.
The Government has backtracked The FM said that there are 4,83,000 tax
to some extent and said that this was appeals pending before the CIT(A), Tribunal,
not the intention and that people have High Court and Supreme Court.
misunderstood. Let us hope this proposed This law will enable an assessee to settle
amendment is withdrawn. some of these appeals, by paying just the
Another important amendment for Non- tax (and no interest or penalty) or 25% of the
Resident Indians and NR persons of Indian amount of a penalty, if a Declaration is made
origin is that at present they can come on and the tax is paid by 31st March 2020.
visits to India for upto 181 days in a financial If the Tax or penalty is paid by 30th June
Year (April through March) and still retain then the amount payable will be higher, but
their NR status. This is now proposed to be there can still be a substantial reduction in
reduced to 120 days. liability, and more importantly, one can get
peace of mind!
Penalty But in all these matters, do remember that
Compliance and record keeping are the the fine print is very important and in law, as
name of the game nowadays. in life, don’t take anything for granted!
39 SENIORS TODAY | Issue #8 | February 15, 2020
