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Government officials aware of the development were quoted in the report as saying that the data shows that donations made by these taxpayers was not consistent with their declared incomes and expenditures.
The government official said, “In all 8,000 odd cases, the donation was exactly the amount required to lower the tax slab or get a full exemption and was paid by cash.” He added, “Also, an exceptionally high amount was paid to tax professionals, even by a straight salaried person.”
Notices were also sent to small businesses which donated to charitable trusts as their incomes and donations did not add up.
The department is also looking into charitable trusts that facilitate such transactions. So far, there has not been any action on such trusts, however, there is a provision to cancel their tax exemption status if they are found to be involved in such illicit practices.
Elaborating on the matter, experts said that tax evasion using donations was possible in the past but strict complilance and data collection by the tax department makes evasion a lot more difficult. To this end, donations above Rs 2,000 have been disallowed.
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