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Section 35F of THE WEALTH-TAX ACT, 1957

If a person abets or induces in any manner another person to

make and deliver an account, statement or declaration relating to any net wealth chargeable to tax which is false and which he either knows to be false or does not believe to be true or to commit an offence under sub-section (1) of section 35A, he shall be punishable,—

(i)in a case where the amount of tax, penalty or interest, which would have been evaded, if the declaration, account or statement had been accepted as true, or which is wilfully attempted to be evaded, exceeds one hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine;
(ii)in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and with fine.

Summary

It is a crime to help or encourage another person to deliver a false wealth tax return, account, or statement.
It is also illegal to help someone commit tax evasion under Section 35A.
If the amount of tax, penalty, or interest the person tried to evade is over one hundred thousand rupees, the punishment is rigorous imprisonment between six months and seven years, along with a fine.
For any other case where the amount is one hundred thousand rupees or less, the punishment is rigorous imprisonment between three months and three years, plus a fine.

Practical examples

1An accountant, Mr. Sharma, advises his client to hide a luxury yacht worth 2,000,000 rupees from his wealth tax return, leading to an evaded tax of 150,000 rupees. Mr. Sharma can be punished with up to seven years of rigorous imprisonment and a fine for helping his client file a false return.

2Mrs. Gupta helps her brother create fake documents to hide his wealth, saving him 40,000 rupees in wealth tax. Since the evaded amount is under 100,000 rupees, she faces between three months and three years in prison, plus a fine.

FAQ

1. What happens if I help my friend file a fake wealth tax return?

You can be punished with rigorous imprisonment and a fine, even if it is not your own tax return.

2. Does the punishment change based on how much tax is hidden?

Yes, the penalty is harsher if the evaded tax, penalty, or interest is more than one hundred thousand rupees.

3. Is there always a fine included with the prison sentence?

Yes, the law states that the punishment will include both rigorous imprisonment and a fine in all cases.

Test yourself

Q1.Under Section 35F of THE WEALTH-TAX ACT, 1957, what is the minimum term of rigorous imprisonment if a person abets a false return resulting in tax evasion of 150,000 rupees?

Q2.Under Section 35F of THE WEALTH-TAX ACT, 1957, what punishment applies if the tax evaded through an abetted false return is 50,000 rupees?

Q3.Under Section 35F of THE WEALTH-TAX ACT, 1957, which of the following acts is specifically mentioned as punishable?

Q4.Under Section 35F of THE WEALTH-TAX ACT, 1957, what is the maximum prison sentence for helping someone evade 200,000 rupees in wealth tax?

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