Income Tax

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  1. Akshara

    Akshara New Member

    Hello,

    We borrowed money from people to send our son to college in US. We had a property which we were able to sell after a year he went to college but not at the price we expected to sell. Hence, the entire money we got from selling the property went towards his college fees and in repaying the money we had borrowed.

    As of today we don't have any property to sell and are under debt.

    Last month we received a notice from IT dept. for penalty for default of payment of income tax on the property we sold in FY 2013-2014.

    What can be the consequences in such a scenario. Any help on this would be hugely appreciated.
     
  2. SAGAR GOSWAMI

    SAGAR GOSWAMI New Member

    Capital gains on selling your property is taxable .. have u filed your return considering this ?
     
  3. ZED

    ZED Well-Known Member

    You must have received some other notice aswell. Kindly let us know about the notices which you have received and whether the return was filed or not?
    In some cases penalties can be waived.
    Tell us all the info you have on the subject matter.

    Even if penalty is waived, tax might still have to be paid.
     
  4. Akshara

    Akshara New Member

    Thank you for replying. We received a notice u/s 143(2) of IT act for hearing before the INcome Tax officer. What are the cases where penalty can be waived? We do not have any assets to pay the tax now. The officials are asking for a hefty amount to avoid criminal prosecutions. What are the consequences of criminal prosecutions?
     
  5. ZED

    ZED Well-Known Member

    Notice of 143(2) is of scrutiny, you should take assistance of some tax practitioner in your locality who can represent you to AO.
    In cases where it would cause undue hardships to an assessee and if the assessee co-operate with the officer then penalty levied can be cancelled but its lengthy procedure and is at discretion of AO.

    Criminal prosecution can mean they can take you to court and court can order for imprisonment.
    As you mentioned that you do not have any asset to pay the penalties and taxes, it would fall in case of undue hardship.

    You will have to take assistance of some practicing CA and explain your financial position.

    Sometimes tax can also be allowed to be paid in installments.
     
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