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What is Income Tax Raid – Rules & Regulations

Narendra Kumar

| Updated: Jan 16, 2018 | Category: Income Tax, Taxation

Income Tax Raids

In India, Income tax is levied by the Central Government and the State Government. Some minor taxes have to be paid by people belonging to a particular region such as Municipal Taxes. This imposition of the tax is derived from the Constitution of India which allocates different taxes between Central and State. Income Tax authorities permit all individuals, organization to self-assess their income and pay taxes if they are eligible. Sometimes due to fraudulent activities by Individual or organization, the tax authority has vested the power to conduct surveys and raids.

These raids are made considering facts and information, Income, Annual reports, the Income-tax return filed by the Individual or entity, through the payment of debt and credit card, and a network of informants. If a person systematically plans his income and expenditure and pays tax regularly, need not worry about it.

Rules and Regulation regarding Income Tax Raids

Authorized Officer to Permit Raids

  • The Director of Income Tax authority
  • The Chief Commissioner of Income Tax authority
  • The Commissioner of Income Tax authority
  • Joint Director or Joint Commissioner of Income Tax authority

When the Income Tax raid is Directed?

  • Income tax officer has relevant information about the tax fraud and he has the reason to believe it through documents and proofs.
  • The search and raids can be done by such an officer who is not below the rank of Income Tax Officer. The raid can also be delegated to the subordinate officer but he should not be below the rank of Income Tax Officer. This delegation of authority must be clearly specified in a search warrant in Form 45.
  • A person who is in possession of money, bullion, jewelry or any other valuable items or property but has not been disclosed or will not disclose.
  • A person to whom summon has been served under section 131(1) or a notice has been served under section 142 (1) to produce books of accounts or other relevant documents which have been not delivered to desired authorities.
  • A person to whom summon has been served under section 131(1) or a notice has been served under section 142 (1) where it is not possible to produce other documents for proceedings under the Act.

Powers of Income-Tax Authority during Raid Process?

  • The officers have authority to enter a premise, building, vehicle, vessel, or aircraft where there is a suspicion of fraudulent activities and the concerned officer has a motive to suspect books of accounts, other documents, money, bullion, jewelry.
  • The officers have authority to search a person who has to enter a premise, building, vehicle, vessel, or aircraft where there is a suspicion of fraudulent activities and the concerned officer has a motive to suspect books of accounts, other documents, money, bullion, jewelry.
  • Where the Authorized officer has sufficiently caused to conduct a search if a person has not disclosed his income.
  • The Income Tax officer has the power to open the lock on any door, box locker, safe where the key is not available.
  • The officer has a right to examine the books of accounts or other documents where all the data of the company or individual is stored in electronic form.
  • The Officer can place a mark of identification on any records, books of accounts or other documents.
  • The officer can seize any books of accounts, documents, records, money, jewelry or any precious article if found in the search.
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Narendra Kumar

Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.

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