Prominent differences in between the functioning of Enforcement Directorate Of Income Tax and IT Department?

Both the income tax department and Enforcement Directorate of income tax function under the revenue department of the Ministry of Finance.  Both are empowered by the constitution of India.  The income tax department is primarily responsible only for the administration purpose of collecting the income tax revenue for the Government.  The enforcement directorate of income tax is responsible for enforcing the economic laws and fighting economic crime in India.  In other words, if you are paying income tax it will be received, processed and finalized by the income tax department.  If you are eligible for paying tax but evading to pay  then it is the work of the enforcement directorate of income tax to punish you legally or with penalties for not paying the income tax.

Differences between Enforcement directorate and income tax:

Enforcement Directorate was formed in 1947 as part of Department of Economic Affairs to regulate FERA or foreign exchange regulation Act.

The income tax department was instituted by the constitution of India under Article 265 by Section 10 (1) in 1961.

One of the functions of Enforcement Directorate or ED is regulator of the income tax payments and punishing the defaulters among other crimes.  The taxes evaded or manipulated will be investigated by the Directorate of the income tax and brought to justice.

The roles of income tax and Enforcement Directorate of income tax:

The role of the income tax department stops with reporting of the irregularities or the illegalities of the tax payment to the Directorate of the income tax.  The ED which is commonly known as raids the premises and other places of the income tax evader to bring out the undisclosed income in the form of assets, properties, cash, jewelry and many more to be booked for violation of income tax payment.

Hence it is better to deal with the income tax department by paying income taxes and filing regular returns to evade ED or the enforcement directorate of income tax.