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No harassment by Income Tax for deposits up to Rs.1.5 – 2 lacs

Replies given by Revenue Secretary Dr. Hasmukh Adhia on the questions relating to action by Income Tax Department in respect of old currency deposited in banks 

Q.1  A lot of small businessmen, housewives, artisans, workers may have some cash lying as their savings at home, will the income tax department ask questions if the same is deposited in banks?

A.1: Such group of people as mentioned in the question need not worry about such small amount of deposits up to Rs.1.5 or 2 lacs, since it would be below the taxable income. There will be no harassment by Income Tax Department for such small deposits made.

Q.2: Will the Income Tax Department be getting reports of cash deposits made during this period? If so, will the current threshold of reporting requirement of reporting cash deposits of more than Rs.10 lacs will only continue?

A.2: We would be getting reports of all cash deposited during the period of 10th November to 30thDecember,2016 above a threshold of Rs. 2.5 lacs  in every account.  The department would do matching of this with income returns filled by the depositors. And suitable action may follow.

Q.3: Suppose the department finds that huge amount of cash above Rs.10 lacs is deposited in a bank account, which is not matching with the income declared, what would be the tax and penalty to be paid on the same?

A.3: This would be treated as the case of tax evasion and the tax amount plus a penalty of 200% of the tax payable would be levied as per the section 270(A) of the income tax Act

Q.4: It is believed that a lot of people are buying jewelry now, how does department plan to tackle this?

A.4: The person who buys jewelry has to give his PAN number. We are issuing instructions to the field authorities to check with all the jewelers to ensure that this requirement is not compromised. Action will be taken against those jewelers who fail to take PAN numbers from such buyers. When the cash deposits of the jewelers would be scrutinized against the sales made, whether they have taken the PAN number of the buyer or not will also be checked.

The Central Government has taken a decision that old 500 & 1000 rupee notes will be accepted for making payments towards fees, charges, taxes and penalties payable to the Central and State Governments including Municipal and Local Bodies. Such old notes will also be accepted for making payment of utility charges for water & electricity etc. However, these facilities will be available only till midnight of 11th November,2016.

PM of India assures to create a corruption free India
Prime Minister Shri Narendra Modi has expressed happiness at the patient and orderly manner in which the citizens are getting the notes exchanged in banks following the cancellation of the legal tender character of the high denomination bank notes of Rs.500 and Rs.1000. In a series of tweets, the Prime Minister also said that it is heartening to see such warmth, enthusiasm and patience of the citizens to bear this limited inconvenience for a greater good. He assured that the Government is unwavering in its effort to create an India which is corruption free and in ensuring that the fruits of development touch every citizen.“So happy to learn that citizens are expressing their gratitude to bankers & getting notes exchanged in a very patient and orderly manner. It is also heartening to learn that people are actively volunteering to help senior citizens withdraw money and exchange their currency. Such warmth, enthusiasm and the patience to bear limited inconvenience for a greater good is indeed very heartening. I assure you the Govt is unwavering in its effort to create an India that is corruption free & fruits of development touch every citizen “, the Prime Minister said.

About Sanjay Trivedi

Sanjay Trivedi is honorary editor of Asia Times. He is senior Indian Journalist having vast experience of 25 years. He worked in Janmabhoomi, Vyapar, Divya Bhaskar etc. newspapers and TV9 Channel as well as www.news4education.com. He is serving as Media Officer in Gujarat Technological University, the university which controlling 440 colleges of Engineering, Management, Pharmacy & Architecture colleges in Gujarat.

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