21/4/2016, New Delhi: 14 properties have been sealed by property tax department of Pune after being found defaulted on tax payment in just three days. The property owners had refused to pay the tax amount so, strict action have been taken against the owners. 23 squads have been formed by the department to recuperate the dues. Notices were sent to these owners and were asked to pay the dues. All these properties were commercial ones that included offices and shops. Property tax is that value which has been accessed for the property to be taxed and is a levy by the government on real estate. Then multiplying the fair market value of the property by the current tax rate gives the amount of tax payable. Most people argue on the idea of giving a part of their earning to the government but actually tax is a very vital part of income for the government. Commercial property in India has been witnessing a massive tax evasion problem according to the records there are nearing 2.84 lakhs tax defaulters in PMC only.
In India, there has been two aspects of not paying tax which is in common practice i.e. tax avoidance and tax evasion. Tax avoidance is when one somehow finds a loophole that keeps them away from paying tax which is not considered strictly illegal. On the other hand, Tax evasion is when someone does not pay the tax when they are actually due which is considered strictly illegal. Some of the common practices that are followed in India for not paying taxes includes:
-Smuggling: Some people use furtive ways to move the goods international or through state borders to avoid paying the taxes that is like escaping the tax overall.
-Submission of false tax returns: At the time of filing tax people might submit false information to considerably lessen or completely nullify the tax they are supposed to pay.
-Claim exemption by using fake documents: Members who do not qualify under the government strata of tax exemption also, produce fake documents to get under that privileged section.
-Income not reported: The most common practice where people just not report any income that they receive in the financial year.
-Maintaining offshore accounts: These accounts are maintained outside the country for storing the money and not disclosing it to the tax department about any such existing bank account.
Failing to pay taxes can lead to heavy penalties under the government of India and in some of the cases it can be a substantial sum to pay. Government has taken various steps to reduce the dues and use of GIS to register commercial properties is one of the ways. In these years the commercial property sale in India has increased due to good return on investment and capital appreciation. What the investors are not understanding is the tax they pay is the money that is invested in various development projects that can in return would be beneficial to them.