financial services · Taxation

Cash Deposits Over Limit May Face 200% Penalty Before Income Tax Returns Are Filed

The income tax department may slap a hefty 200% penalty on unexplained big cash deposits in banks even before annual income tax returns are filed so as to prevent black money being converted into white during the 50-day window provided for turning in the junked Rs500 and Rs1,000 notes, a finance ministry official said.

It is also collating data on spurt in deposits in zero- balance Jan Dhan accounts and will slap a 200% penalty on unexplained high value cash deposits, he said. After withdrawing old Rs500 and Rs1,000 notes, the government has allowed the banned notes to be deposited in bank accounts or exchanged for new legal tenders till 30 December. This has led to cash balances popping up in millions of Jan Dhan accounts, opened under a government scheme for beneficiaries to get their entitlements like LPG subsidy.

“Any unexplained source of income can be charged with tax and a 200% penalty on it. That can happen before filing of ITR. No retrospective amendment is required if high value deposits are caught before filing ITR,” he said.

The Finance ministry has carried out series of advertisements in newspapers assuring people that their hard earned money is safe and depositing junked Rs500 and Rs1,000 notes of up to Rs2.50 lakh in bank accounts will not be reported to the tax department. It has also stated that farm income continues to remain tax free and can be easily deposited in bank. Small businessmen, housewives, artisans, workers can also deposit cash in their accounts without any apprehensions, it has said. On farm income, the official said the tax department will match the acre of land the person has and the deposits made in the bank account to identify any discrepancy.

“Tax department is collating data on spurt in Jan Dhan accounts. It will analyze all data and impose tax plus a 200% penalty in cases of unexplained high value deposits,” the official said. Under section 12 of the Prevention of Money Laundering Act, tax department can ask for any information from any agency including the Reserve Bank of India and cooperative banks besides all scheduled banks. To prevent misuse of the 50-day window provided for exchange of genuine holdings of the scrapped Rs500 and Rs1,000 notes, the tax department may resort to imposing tax and penalty even before annual income tax return (ITR) is filed, the official said.

You can file your ITR with ease via All India ITR.

Source : http://allindiaitr.blogspot.in/2016/11/cash-deposits-over-limit-may-face-200.html

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