The department of Income Tax has sent notices to over 100 Indian investors in order to verify the genuineness of the tax treaty benefits that they enjoyed in the past years. The move is with a view to check whether the Tax Treaty benefits are being misused by the persons.
Every investors are asked to submit detailed documents regarding the tax treaty benefits by finding that there is no clarity on investments made by many people, which means they have not declared them properly. Accordingly, the department has informed all the DGs (Director Generals of Income Tax) across India and issued notices.
Reports revealed that out of a large number of investors, only few are filing tax return forms which indicate tax evasion on such investment. The initiative took by the department will increase the efficiency and clarity of transaction.
The main objective of issuing such notices by the department was to check to whether the treaty benefits are properly claimed by the investors in the previous years or not.
In the notice it was also clarified by the department that the law pertaining the power to issue notice for the prevention of evasion or avoidance of Income Tax chargeable under the Act and the same is prevail under section 90 of the Income Tax Act 1961.
