Cracking down on people who hold black money, the government has said that cash deposit above Rs 2.5 lakh will attract tax and a 200 percent penalty.
The move comes after the government’s recent decision to ban Rs. 500 and Rs.1000 currency notes. To change the notes, people have to deposit them in the bank. “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 told PTI.
If there is mismatch between income declared and the cash deposits, the government will treat it 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.
However, people with small amounts of cash lying at home as their savings should not be worried.
“Small businessmen, housewives, artisans and workers 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,” said Adhia.