Keeping the conversation between Lord Krishna and Arjuna as the foundation, we will learn certain basic financial and tax matter. Let us try to get answers to our questions in a bit different and joyful manner. The character of Arjuna will be played by the common man or tax payer and the character of Lord Shri Krishna the Expert for giving solutions to all problems. Conversation is named as “KARNITI”.
Arjuna: Krishna, now due dates of return filing is approaching, taxpayer will file Income Tax Return for the year ended 31st March 2020. The taxpayers and Tax Experts, Chartered Accountants, etc. are in planning and working mode and business community is getting busy.
Lord Krishna: Yes Dear Arjuna, One should feel happy for the work done by him in life. He should not expect the fruit (output) from it. By filing correct Income Tax Return, taxpayer gets mental and financial peace. By paying tax, the taxpayer has served his Nation.
Arjuna: Very correctly said. A Man should not depend on the untrue hopes in his life. Krishan, Now please tell me in detail, when and in what situations a person feels guilty of less payment of Income Tax?
Lord Krishna: Listen Arjuna carefully, in this days of Kalyuga, “The one whose wrong doing gets exposed is named as dishonest, otherwise he is honest.” This misunderstanding has emerged in Modern social life. There are many instances when a Taxpayer feels guilty of not paying or less paying income tax. Few of them are given below:
1. When Penal proceedings like, Inspection, Assessment, Survey and Raid are initiated by Income Tax Department.
2. When Bank rejects or reduces House, Vehicle, etc loan amount due to disclosing less income in return filed.
3. When due to short cash or funds, a businessman takes “Book Entry” from other person and the other person cheats him.
4. Due to shortage of funds and taxed income, a person purchases property (Benami) in the name of other person and the other person cheat him.
5. Due to off shoot of enquiry from Sales tax, Service tax, Excise, Provident Fund, etc. major difference is found in Income tax details.
6. At the time of starting new business proposal with Big or MNC Law abiding Companies, for want of registrations under different statutes, proposal is rejected.
7. Problems faced in compliance of financial biding terms at the time of filing tender of Government or Companies, and tender gets rejected.
8. For increasing business, there is need of new partner or shareholder but problems faced in valuation of business, as taxable income is shown less.
9. Behaving like blind follower in business world, and following other non-tax complying people and paying less tax or no tax and getting caught without proper tax planning.
10. When there is shortage of bank funds for marriage, plot, house, gold etc.
11. When unaccounted property found on enquiry from Anti-Corruption Bureau of government salaried employee.
12. When financial quarrel occurs in give and take financial transactions with the nearest person such as relative, friends, partner, employees, Supplier, business competitor, etc. and fear of disclosing business secrets.
13. Adjustment made in Current year in expenses and income, but in next financial year due to those adjustments problem occurred.
14. At the time making insurance claim, problem faced due to showing less stock. Further in instances of claims in cases of theft or burglary.
15. When Hawala or bogus Purchases and Sales transactions got exposed.
Arjuna: Krishna, today you opened the eyes of the taxpayer. In the life, taxpayer faces many problems and earns money but for greed of little more money, he pays less tax and gets trapped.
Lord Krishna: My friends Arjuna, there are many more examples. As per Income Tax Act, on the undisclosed income, income tax @ 30% and penalty @ 30% with interest thereon can be imposed by the department. Everyone should take his own decisions by considering financial situation faced by them in his life. We should see what we are doing not of others. But in this Todays expensive world, the needs are ever increasing and rising corruption and costs, the honest person also falls in the greed of it. It is said that “Tax is a Fine on Honesty” it means the honest person have to pay more tax. This is true when, government do not have efficient, equal and transparent taxing system.
Arjuna: What Lesson a taxpayer should learn from this guilty felling of less payment of Income Tax?
Lord Krishna: Listen Arjuna, I will tell you one very interesting story for learning. Once a thief, while reading news in newspaper was laughing loudly. The other thief asked him, “why are you laughing”? Then thief replied, “Yesterday we has a theft of Rs. 25 Lakhs of a businessman and the said businessman had disclosed to Police of just Rs. 2 lakhs of theft. The other theft asked, but why? The first theft answered “Businessmen may have done this, due to FEAR of Income Tax Dept.”. Everyone should introspect on this story.
Republished with Amendments