What will happen if you live in India and do not pay taxes? You must know this.

If you live in India, it is necessary to pay tax. Whether you earn tax from business or job, if you have a tax liability, then you have to pay it. Paying taxes not only increases the national revenue, but many benefits are also provided to the taxpayers by the government. At the same time, there is a provision for financial penalty, penalty, interest recovery, and legal action for tax evasion or non-payment. Taxpayers in India get the option to choose between two income tax regimes. Old tax regime and new tax regime. Each system has its own rules and tax slabs so that a person can choose the best option according to his financial circumstances. Let us know what action can be taken against you if you do not pay tax.

This action can be taken if tax is not paid.

Penalty for late filing (Section 234F): There is a penalty for not filing an income tax return by the due date. If your total income is more than ₹5 lakh, the penalty is ₹5,000. The penalty for income up to ₹5 lakh is ₹1,000. Section 234A Interest is charged at the rate of 1% per month for delay in filing returns.

Notice from Income Tax Department (Section 156): The Income Tax Department can issue demand notices under Section 156, requiring payment of dues within a certain time limit. Ignoring these notices can lead to legal action.

Penalty for tax evasion (Section 270A, 276CC): Tax evasion, whether done intentionally or unintentionally, has the provision of strict penalties. Misreporting of income can attract a penalty of 50% to 200% of the underreported tax under Section 270A.

Asset seizure: Upon persistent non-compliance with income tax notices, the income tax department can seize assets such as property and vehicles to recover the outstanding amount.

Financial reputation and travel ban: Non-payment of tax can have a negative impact on your credit score and make it difficult to obtain loans or credit in the future. In severe cases, the Ministry of External Affairs may cancel the issuance of passports, restricting international travel.

Trial and imprisonment: In significant cases of tax evasion, a court trial is possible, which can result in imprisonment ranging from three months to seven years along with a hefty fine.

Disclaimer: This content has been sourced and edited from indiatv.in. While we have made modifications for clarity and presentation.