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."

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."