labels: economy - general, union budget 2007
FM makes life tougher for tax evaders news
02 March 2007

New Delhi: The Finance Bill, 2007 has tightened penalty provisions against tax evasion and has overhauled the income-tax settlement commission procedures. The new measures will come into effect on April 1, 2007.

Under the new penalty system, evaders will have to pay a penalty during search cases at 100-300 per cent of the amount of tax evaded. This is a significant change from the earlier practice of allowing evaders to give a statement during the course of the search in lieu of penalty payments.

Also, evaders will no longer be allowed to approach the settlement commission.

This is one of the four key changes made in settlement commission procedures, senior revenue department officials say.

For starters, the application to the commission will have to be made together with the payment of the tax liability. The application can be made only before the assessment officer has completed proceedings, and not after.

Besides, to cut delays, the current two-step procedure the commission follows to rule on the admissibility of an application has been changed to a 15-day time-bar, after which the case will be deemed to have been admitted.

Also, the settlement commission will have to dispose of petitions within 180 days, after which the case will go back to the assessment officer.

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FM makes life tougher for tax evaders