After the historical decision of banning Rs. 500, Rs. 1000 notes from the market to curb the fake currency flow as well as to take out the black money, the government has now warned that the penalty of 200% as well as the tax could be added on the people depositing cash above Rs. 2.5 lakh under the 50-day window.

Revenue Secretary Hasmukh Adhia said, “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.”

He added that any mismatch in the income deposited by the account holder will be considered as the tax evasion. He said, “This would be treated as a case of tax evasion and the tax amount plus a penalty of 200 percent of the tax payable would be levied as per the Section 270(A) of the Income Tax Act.”

While announcing the ban on the notes of Rs. 500 and Rs. 1000, PM Narendra Modi announced that the people will be allowed to deposit the old notes in the banks from November 10 to December 30th 2016.

Adhia further said that small businessmen, housewives, artisans and workers who contain few cash don’t have to worry as they will not be coming under the scanner of the tax department. He said, “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 mad.”

He also said that people who are buying jewelry will have to provide the PAN number. “We are issuing instructions to the field authorities to check with all the jewelers 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.”

By Prajakt K.