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Scrapping of high-value notes: Deposits above Rs. 2.5 lakh to face tax, penalty of 200% on mismatch

News Agencies | Updated on: 10 November 2016, 15:06 IST
Rs. 2.5 lakh to face tax, penalty of 200% on mismatch
Rs. 2.5 lakh to face tax, penalty of 200% on mismatch

Cash above Rs. 2.5 lakh deposited in banks following the scrapping of Rs. 500 and Rs. 1,000 notes could attract a tax and a 200% penalty in case it is disproportionate to the account owner's income, the government has said.

The banks have been asked to keep the details of PAN card of people depositing such large amounts over the 50-day window till 30 December.

Also Read: This is how Indians are making money from the currency ban

Similarly, jewellers have been told to keep PAN details of people buying jewellery on cash. Action will be taken against them in case of non-compliance.

The government's move is the sequel to the scrapping of high denomination notes, meant to flush out black money and counterfeit currency.

Also Read: Demonetisation program: Read to end your confusion, especially those who have undisclosed cash

"We will be getting reports of all cash deposited during the period of 10 November to 30 December, 2016, above a threshold of Rs. 2.5 lakh in every account," Revenue Secretary Hashmukh Adhia said.

The Income Tax department, he said, will match this with the income tax returns filed by the depositors. In case of a mismatch, "suitable action may follow," Mr Adhia said. It would be treated as a case of tax evasion.

In such a scenario, the tax amount plus a penalty of 200 per cent of the tax payable would be levied under the relevant sections of the Income Tax Act.

Also Read: Rs 1,000 notes to be introduced with new security features

Mr Adhia said small businessmen, housewives, artisans and workers who had cash lying as savings at home, should not be worried about any tax department scrutiny.

Deposits up to Rs. 1.5 or Rs. 2 lakh would be below taxable income. "There will be no harassment by the Income Tax Department for such small deposits made," he said.

Regarding the purchase of jewellery, he said, "We are issuing instructions to the field authorities to check with all the jewellers to ensure this requirement is not compromised."

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When cash deposits of the jewellers are scrutinised against sales, "it will also be checked whether they have taken the PAN number of the buyer or not," he added.

-PTI

First published: 10 November 2016, 9:56 IST
 
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