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Demonetisation: Deposits above Rs 2.5 lakh to face tax, 200 per cent penalty

Any mismatch with income stated by the account holder will be treated as a case of tax elusion.

tax

New Delhi: Further baggy the stick, central government on Wednesday night warned that cash deposits above Rs 2.5 lakh threshold under the 50-day window could attract tax plus a 200 % penalty in case of income mismatch.

“We would be getting reports of all cash deposited through the period of November 10 to December 30, 2016, above a threshold of Rs 2.5 lakh in every account.

“The (IT) department would do matching of this with IT returns filed by the depositors. And suitable action may follow,” Revenue Secretary Hashmukh Adhia stated tonight.

Any mismatch with income stated by the account holder will be treated as a case of tax elusion.

“This would be treated as a case of tax evasion and the tax amount plus a penalty of 200 % of the tax payable would be charged as per the Section 270(A) of the Income Tax Act,” he stated.

The government has allowed people to deposit money in their bank accounts old currency of Rs 500 and Rs 1,000 denominations, which had been stated invalid in the nation’s biggest crackdown on black money, corruption and fake notes, between November 10 and December 30.

Adhia stated small businessmen, housewives, artisans and workers who had some cash lying as their savings at home should not be concerned about any tax department enquiry.

“Such group of people… need not concern about such small amount of deposits up to Rs 1.5 or 2 lakh since it would be below the taxable income. There will be no harassment by the IT Department for such small deposits made,” he stated.

On people resorting to buying of jewelry, he stated persons buying jewelry has to provide the PAN number.

“We are delivering instructions to the field officials to check with all the jewelers to confirm this requirement is not been compromised.

“Action will be taken against those jewelry shops who fail to take PAN numbers from such customers. When the cash deposits of the jewelers would be inspected against the sales made, whether they have taken the PAN number of the customer or not will also be checked,” he added.

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