New Delhi: Director of 8 lakh companies may be prosecuted if their companies fail to file income tax returns from April 2018. In the recently announced Budget, the Government removed Tax liabilty cap of Rs. 3000.
According to earlier provision companies having tax liability of below Rs. 3000 were exempted to file income tax returns. In this budget this cap has been removed, making Mandatory to all the registered companies to file the returns if they have tax liability of Rs. 0 also.
According to a senior Finance Ministry official, who was part of the Budget making exercise, told ANI that this rule will come into effect from April 1, 2018. He further clarified on the waving off the Rs. 3000 caping, and added that there are 15 lakh companies registered with Ministry of Corporate Affairs.
Only 7 lakh companies are filing returns. Rest 8 lakh companies are not filing returns and claiming that there tax liability is below Rs. 3000 and they are not bound file returns. However, as per the tax officials, many of these companies are shell companies and involved in tax evasions.
To close this route we have removed this Rs. 3000 cap. From April 2018 onwards if these companies will not file their returns they will be prosecuted under section 276CCC. Under the section 276CCC if such companies are found guilty their directors may face a Jail term of 3 months to 2 years. And if the Tax liabilty is more than Rs. 25000 then the Directors of these companies may face a Jail term of 6 month to 7 years.