After the controversial demonetisation move by the Centre on November 8, 2016 to curb black money, the income tax (I-T) department could take the centrestage by turning more stringent for the same purpose. Several surprise raid were carried out in the weeks after the banning of Rs 500 and Rs 1000 currency notes and now the focus could fall on the citizens of the country.
Common man can end up being harassed by the I-T officials if they can't provide necessary documents on their income and expenditure. Unaccounted income is liable to a whopping 83 per cent tax and hence, tax-payers should keep certain things in mind to avoid any kind of ordeal.
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Inherited jewellery or those purchased through disclosed or agriculture income don't fall within the ambit of taxation but those that don't have enough proof will be taxed. This means those who can't provide sufficient evidence in support of their claims can invite scrutinising from the I-T officials.
Entrepreneurs should keep all records of the seed money to set up their firms, as they have to produce them at the I-T department if asked to. A capital amount will be liable to hefty taxing if necessary details are not made available.
It is also safer to maintain details of your financial transaction, especially in case of a sudden increase in the monthly income or spending, as it can make the I-T department suspicious. For instance, I-T officials raided lavish weddings that were held at the time of money crunch due to demonetisation.
