Deposit above Rs 2.5 Lakh to face tax and a penalty of 200%
All banks in India will remain open this weekend to exchange the 500 and 1000 Rs notes, but there are also strict guidelines for those depositing money more than 2.5 Lakh in this 50-day window.
Those who will deposit money of above 2.5 Lakh will face a case of tax evasion if any mismatch found in the income declared.
The government have allowed the citizens to deposit currency of Rs 500 and Rs 1000 which have been declared as invalid. Between November 10 and December 30, 2016, customers can exchange notes up to a value of Rs 4000 with the rest to be deposited in their existing bank accounts.
The center will now keep an eye on all the cash deposited in this window period. If a cash deposit is above Rs 2.5 Lakh the income tax department will match this with income returns filed by them in the year and if any mismatch is found then they will be treated as a case of tax evasion and the tax amount plus the penalty of 200 percent of the tax payable will be levied as per the section 270(A) of the Income Tax Act.
However 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. There will be no harassment by the Income Tax Department for such small deposits made.
For jewelers also there have been guidelines to collect the PAN number of all the buyers, else the jeweler will be under action and when they deposit their cash they will be scrutinized against the sales made whether they have taken the PAN number of the buyer or not.
This will be the nation’s biggest crackdown on black money, corruption, and counterfeit notes.