Answer

1. F

   Facts

   If the tax sought to be evaded is more than ₹25 lakh, the punishment is rigorous imprisonment from 6 months to 7 years with fine. In other cases it is 3 months to 2 years with fine. These are maximum risks; most cases end before trial.

2. P

   Provisions and law

   • Sec 276CC (now Sec 479)Prosecution for wilful failure to file a return on time; jail of 3 months to 2 years, or 6 months to 7 years where tax evaded exceeds ₹25 lakh
   • Sec 279, Income-tax Act 1961Prosecution needs sanction of a senior authority, and offences can be compounded
3. A

   Analysis

   Sec 276CC (now Sec 479) sets these ranges, and the offence is non-cognizable, so police cannot arrest without court permission. The ₹25 lakh line is about tax sought to be evaded, not income, so tax of ₹8 lakh puts you in the lower band. Courts look at whether the failure was wilful. Most taxpayers resolve these through filing, paying tax and compounding.

4. C

   Conclusion

   1. 1Estimate the tax involved for each year.
   2. 2Note which band applies.
   3. 3File, pay and reply to reduce the chance of a complaint.
   4. 4Consider compounding if a complaint is likely.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.