Deposits above Rs250,000 to face tax, penalty on mismatch

World Wednesday 09/November/2016 20:38 PM
By: Times News Service
Deposits above Rs250,000 to face tax, penalty on mismatch

New Delhi: Further dangling the stick, government on Wednesday night warned that cash deposits above Rs250,000 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 Rs250,000 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 on Wednesday night.
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 Rs500 and Rs1,000 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 150,000 or 200,000 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 jewellery, he said persons buying jewellery 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.