1 min read.Updated: 29 Jul 2020, 01:24 PM ISTAvneet Kaur
Cases where the amount of tax sought to be evaded or tax on under-reported income is lesser than ₹25 lakh, the person can be punished with imprisonment of at least three months and up to two years and with fine.
Tax evasion is a crime. Income Tax department has a rigorous punishment for tax evaders. If a person wilfully attempts in any manner to evade any tax, penalty or interest chargeable or imposable, or under reports his income, he can be put behind the bars for a period not less than three months up to seven years depending on the amount of tax evaded or under-reported. The tax payer will be charged a fine as well as per the discretion of the authority. Wilful attempt to evade tax is covered under Section 276C of the Income Tax Act.
Section 276C further explains that cases where the amount sought to be evaded or tax on under-reported income exceeds ₹25 lakh, the person can be imprisoned for a term of at least six months up to seven years and with fine.
Cases where the amount is lesser than ₹25 lakh, the person can be punished with imprisonment of at least three months and up to two years and with fine.
Even worse, if a person wifully attempts to evade the 'payment' of tax or penalty or interest under the Act, he can be imposed with an additional imprisonment of at least three months to two years under Section 276C(2) of the Income Tax Act. The person may also be liable to pay fine at discretion of the court.
For the purpose of this section, a wilful attempt to evade means if a person has any books of account or other documents in his control containing a false entry or statement. Also if a person makes any false entry or statement or , omits any entry in the books of account or other documents, it is considered as a wilful attempt to evasion of tax.