Government likely to decriminalize minor income tax offenses within 100 days
Government is likely to decriminalize minor income tax offenses and replace them with penalty to boost ease of doing business.
The Centre is likely to fulfil a long standing demand of the industry to decriminalize minor income tax offences to prevent prosecution and replace it with penalty, with the aim to boost ease of doing business, reported Moneycontrol quoting a senior government official.
“In 100 days, the government will promote ease of doing business. The Centre is looking at decriminalising some provisions in the Income Tax Act. Threshold will be decided for minor offences for decriminalisation. For some minor offences, a penalty will be acceptable to end prosecution,” the official told Moneycontrol.
The provisions of tax laws have not been decriminalised so far. For income tax offences, the government’s long stand till now has been prosecution.
“There will be decriminalisation of some rules relating to income tax offences. Government is looking at compounding the offences so that there is no prosecution for minor offences, only penalty,” he said.
Internal discussions in the government are currently goin on to decide a threshold for the compounding of offences, he added.
Right now, criminal prosecution in income tax law gets triggered even for minor offences such as delayed payment of TDS for which even directors of a company can be prosecuted. One can be prosecuted under various Sections of the Act and be imprisoned for periods ranging from three months to seven years.
Delayed TDS payment creates a huge issue because even directors of a company are prosecuted. Industry had suggested replacing it with a penalty. Only in cases of more grave offences should criminal prosecution be there. The penalty should be a deterrent and TDS payment delays should be treated as a civil liability, according to an industry source.
Such a step by the government will build an environment of trust between the taxpayer and the authorities, he added.
