Thinking of slipping in those demonetised notes in your income tax returns? Think again

Income Tax Department is trying to be two-steps ahead of all those thinking of passing demonetised currency in their income tax returns this year.

In a statement on Wednesday, Ministry of Finance said that a 'Revised Return' can only be filed if any person, who has filed a return under section 139(1) of the Act or in response to notice u/s 142(1), discovers any omission or any wrong statement therein.

"Post demonetization of the currency on 8 th November, 2016, some taxpayers may misuse this provision to revise the return-of-income filed by them for the earlier assessment year, for manipulating the figures of income, cash-in- hand, profits etc. with an intention to show the current year’s undisclosed income (including the unaccounted income held in the form of demonetised currency in current year) in the earlier return."

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It further said, "It is brought to the notice of tax payers that any instance coming to the notice of Income-tax Department which reflects manipulation in the amount of income, cash-in- hand, profits etc. and fudging of accounts may necessitate scrutiny of such cases so as to ascertain the correct income of the year and may also attract penalty/prosecution in appropriate cases as per provision of law."