Deposits above Rs 2.5 lakh to face tax, 200% penalty on income mismatch
NEW DELHI: The government on Wednesday warned that cash deposits above Rs 2.5 lakh threshold under the 50-day window could attract tax plus a 200 per cent penalty in case of income mismatch.
"We would be getting reports of all cash deposited during the period of November 10 to December 30, 2016, above a threshold of Rs 2.5 lakh in every account.
"The (tax) department would do matching of this with income returns filed by the depositors. And suitable action may follow," revenue secretary Hashmukh Adhia said tonight.(nov9,2016)
Any mismatch with income declared by the account holder will be treated as a case of tax evasion.
"This would be treated as a case of tax evasion and the tax amount plus a penalty of 200 per cent of the tax payable would be levied as per the Section 270(A) of the Income Tax Act," he said.
The government has allowed citizens to deposit in their bank accounts old currency of Rs 500 and Rs 1,000 denominations , which had been declared invalid in the nation's biggest crackdown on blackmoney, corruption and counterfeit notes, between November 10 and December 30.
Adhia said small businessmen, housewives, artisans and workers who had some cash lying as their savings at home should not be worried about any tax department scrutiny.
"Such group of people... need not worry 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 Income Tax Department for such small deposits made," he said.
On people resorting to buying of jewelery, he said persons buying jewelery has to provide the PAN number.
"We are issuing instructions to the field authorities to check with all the jewellers to ensure this requirement is not compromised.
"Action will be taken against those jewellers who fail to take PAN numbers from such buyers. When the cash deposits of the jewellers would be scrutinised against the sales made, whether they have taken the PAN number of the buyer or not will also be checked," he added.