In what is deemed to inflict severe blows on people who have hoarded stacks of black money, Finance Ministry today declared that every cash deposit above 2.5 lakh rupees will be thoroughly investigated. If tax has not been paid on the money, along with TAX, there will also be a FINE of staggering 200 % on tax if there is a mismatch in declared income and the amount being deposited in cash. This announcement comes a day after PM Modi announced that all the notes of Rs. 500 and Rs. 1000 would cease to be legal tender from midnight.
As the old currency notes of Rs. 500 and Rs. 1000 can be deposited in the banks till 30 December, people with unaccounted money who go to the banks will be in deep trouble now as they will have to pay huge fines. For example, someone goes to a bank to deposit 10 lakh rupees in cash and if it is found that the amount does not match the income declared while filing income tax, the person would have to pay 30% tax (Rs. 3,00,000) and another Rs. 6,00,000 as fine (200% fine on the tax). So, for unaccounted cash of Rs. 10,00,000 the depositor will have to pay Rs. 9,00,000. This announcement of government has made the people who are hoarding black money sleepless as now they cannot get their stacked cash exchanged without paying a huge fine.
“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. 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,”revenue secretary Hashmukh Adhia said.
Common people such as farmers, housewives, small businessmen or artisans need not worry as the deposits below Rs 2.5 lakh will not entail any tax or fine if the depositor shows valid ID card while depositing the amount in the bank. This will provide relief to common man who has stored his/her hard-earned savings in home.
Since yesterday night, many people were reported to buy huge amount of gold and jewellery, revenue secretary Hansmukh Adhia announced that PAN card has been made mandatory for every purchase of gold and every jeweller who doesn’t provide the PAN card details will be prosecuted. Since the onus is now on the jewellers to show the PAN card of every customer, it will be the jewellers who will be in trouble. “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.