Indian tax authorities are putting to good use their information network to spot evasion and bolster collection.
Taxmen have now trained their sights on several investors who had invested a few lakhs in mutual fund schemes and then switched between schemes. The income-tax department is scrutinising the tax returns of several individuals, who have switched their investments during the course of a year.
The exercise is primarily aimed at preventing tax evasion and ensuring greater compliance. In several cases, the income-tax department has started examining tax returns to ascertain whether investors have short changed it by not paying short-term capital gains tax while exiting a scheme before the completion of one year. Switching schemes does not violate any norms, but investors have to pay a short-term capital gains tax of 15% if they sell the units of a mutual fund or stocks before one year.
Taxmen have now trained their sights on several investors who had invested a few lakhs in mutual fund schemes and then switched between schemes. The income-tax department is scrutinising the tax returns of several individuals, who have switched their investments during the course of a year.
The exercise is primarily aimed at preventing tax evasion and ensuring greater compliance. In several cases, the income-tax department has started examining tax returns to ascertain whether investors have short changed it by not paying short-term capital gains tax while exiting a scheme before the completion of one year. Switching schemes does not violate any norms, but investors have to pay a short-term capital gains tax of 15% if they sell the units of a mutual fund or stocks before one year.
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