Govt removes exemptions from I-T filing

In a move to crack down on shell companies, the government has proposed to remove exemption available to firms with tax liability of up to ~3,000 from filing income-tax (I-T) returns from the next fiscal year.

The Union Budget 201819 has rationalised the I-T Act provision relating to prosecution for failure to furnish the returns.

Thus, a managing director or a director in-charge of the company during a particular financial year could be liable for prosecution in case of any lapse in I-T return filings for any financial year beginning April 1.

“The income-tax departments would now track investments by these companies. Also, the focus will be on those firms that show less profit and also those who file I-T returns for the first time,” a finance ministry official said.

There are about 1.2 million active companies in the country, out of which about 700,000 are filing their returns, including annual audited report, with the ministry of corporate affairs.

Of this, about 300,000 companies show ‘nil’ income.