Undisclosed income found in tax raids : Budget 2022 bars set off of losses
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In this article we explored The Budget 2022 which has proposed a new anti-tax evasion rule that will prevent people from misusing the provision of setting off losses on any undisclosed income discovered during a search operation or a survey by the income tax department. The Finance Bill 2022 has proposed to amend section 79 of the Income-tax Act in this regard
“Presently, there is ambiguity regarding set off, of brought forward loss against undisclosed income detected in search operations. It has been observed that in many cases where undisclosed income or suppression of sales etc. is detected, payment of tax is avoided by setting off, of losses. In order to bring certainty and to increase deterrence among tax evaders, I propose to provide that no set off, of any loss shall be allowed against undisclosed income detected during search and survey operations,” said the finance minister Nirmala Sitharaman in her budget speech.
Finance Bill 2022 has suggested the following changes:
Explanation.––For the purposes of this section, the expression “undisclosed income” means,––
(i) any income of the previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132 or a requisition under section 132A or a survey under section 133A other than under sub-section (2A) of that section, which has—
(A) not been recorded on or before the date of search or requisition or survey, as the case may be, in the books of account or other documents maintained in the normal course relating to such previous year;
or
(B) not been disclosed to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner before the date of search or requisition or survey, as the case may be;
or
(ii) any income of the previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the previous year which is found to be false and which would not have been found to be so, had the search not been initiated or the survey not been conducted or the requisition not been made.’
Author
CA.DR. Gaurav Bhambri
Category : Income Tax | Comments : 1 | Hits : 8518
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CA. Dr. Gaurav Bhambri
09-Feb-2022 , 04:14:22 am