Sometimes any person fails to pay the tax then it is recovered in the following manners :
- RECOVERY THROUGH ARREST :-
The commissioner can serve notice to the defaulter and will ask to pay the amount due. The last date of payment will be also specified.
If the amount is not paid during that time then he can recover the amount in the following manner.
a). The commissioner has power to arrest the taxpayer and can detain him in prison for the period of six month.
b). He can order to sale the property of the tax payer.
c). He can appoint the receiver to manage the property of the taxpayer.
- RECOVERY OF TAX BY THE DISTRICT OFFICER (REVENUE) :-
The commissioner can also issue the certificate to the concerned District officer (Revenue) where income tax defaulter’s property or business or he himself resides. All the details will be mentioned in the certificate. The district officer will recover the amount of tax as an arrears of land revenue.
- RECOVERY BY HOLDING THE MONEY ON BEHALF OF TAXPAYER :-
The income tax commissioner may issue a notice to a person from whom the tax payer has to receive the money. Sometimes taxpayer authorizes some person that he can collect the money on his behalf. So this notice is issued such person that whenever an opportunity arises the amount should be paid to the commissioner instead of paying to the taxpayer. On the receipt of such notice the above mentioned persons are required to obey the orders.
- RECOVERY FROM PERSON LIABLE TO MAKE A SERIES OF PAYMENT TO A TAXPAYER :-
Sometimes one person makes a series of payment. Such as salary to taxpayer. If taxpayer is a defaulter then commissioner may issue the notice to that person that he should pay the specific amount out of each payment made to the defaulter taxpayer until the tax amount due is paid.
- RECOVERY FROM PERSON LEAVING COUNTRY PERMANENTLY :-
Sometimes if commissioner feels that a person who is defaulter will leave the country permanently without paying the tax. He may issue the orders to the immigration officer that such person may not be allowed to leave the country until he pays the tax or makes such arrangement to satisfy the commissioner. Before leaving the country he will show the certificate issued by the commissioner then he will be allowed to leave the country.
- RECOVERY FROM LIQUIDATION :-
As the liquidator takes the per session of the office, he issues notice of this fact to the commissioner. The commissioner will inform about tax condition to the liquidator with in 3 months. The liquidator will pay the amount on the receipt of such notice.
- RECOVERY FROM NON-RESIDENT MEMBER OF AN ASSOCIATION OF PERSONS :-
If the above persons have to pay tax in respect of the members share of the profit of the association it can be recovered out of assets of the association or from a resident members of association.
COLLECTION OF TAX IN CASE OF PRIVATE COMPANIES AND ASSOCIATION OF PERSONS :-
If any private company fails to pay the tax of any tax year it can be recovered by the commissioner from the following ways :
- Tax can be recovered from the director of the company other than an employed director.
- A tax payable by a member is recovered from the association.
- Any shareholder who owns more than 10% of the paid up capital of the company. A shareholder who pays tax in this way can recover the share of tax paid from the company or from another director or any other shareholder.
Refund Of Tax :-
Some times a taxpayer has paid more than the proper chargeable amount. Taxpayer will apply to the commissioner that amount is paid in excess, it may be refunded. The commissioner will decide the refund application with in 45 days.
i). The application is not be made on prescribed form,
ii). Application is made with in two years of the date of tax paid or assessment order issued.
iii). The commissioner must be satisfied that tax has been over paid.
Methods Of Refund :-
i). This amount of refund may be adjusted any other amount of income tax payable.
ii). The refund should be applied against any other outstanding tax.
iii). The extra amount paid should be to the applicant.