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If People Deposited Upto Rs 2.5 Lakhs of Demonetised Currency: Chances to Get Taxed at 50%

If People Deposited Upto Rs 2.5 Lakhs of Demonetised Currency

The users who are holding the unaccounted cash, they can deposit the demonetised notes up to Rs 2.5 lakh under the scheme being implemented by the Government.

The government is about to introduce the new amendment in this week in Parliament. This new amendment will let the people who are depositing the unaccounted cash in demonetised Rs 500 and Rs 1,000 notes have to pay 50% tax, along with this they have to lock in 25% amount for four years at zero interest and to leave only 25% of the amount for immediate use.

With the implementation of this new scheme, all the large amount deposits beyond the certain totals could be asked to explain the source. 50% Tax and mandatory 25% deposit scheme must not be applied.

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Tax officials will have an eye on all the significant deposits for the demonetised notes to see if the unaccounted wealth or smaller deposits in a household in different family members accounts.

One of the government official says “There is a Rs 2.5 lakh exemption, but if you have split (the money) and four family members have each deposited this amount, then it will need to be seen.”

These changes to the income tax law were authorised and approved by Union Cabinet on Thursday. The earlier government has mentioned that it will not go to look into the deposits up to Rs 2.5 lakh income tax exemption threshold.

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Revenue Secretary Hasmukh Adhia says that they will be getting all the reports of all cash deposits during November 10 to December 30 and it is above the threshold of Rs 2.5 lakh in every account.

“The department would do matching of this with income returns filed by the depositors. And suitable action may follow.” As per the reports people with the unaccounted cash in the old denominations have been farming it out to the others for depositing in their accounts.

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Deposits over Rs. 2.5 lakh are subjected to face tax

The impact of banning Rs 500 and Rs 1000 Notes in India is creating huge quandaries in the day to day expenses. However banks will allow depositing the amount in their accounts. Here comes the one of the key point in the story. The users who deposit the amount more than Rs.2.5 lakh in their bank accounts for scrapping Rs. 500 and Rs. 1,000 notes should pay the tax to the Government. In case of any uneven values are deposited in their accounts based on the owner’s income, there will be chance of collecting 200% penalty. These are the terms issued by the Government of India.

Government has also asked the banks to maintain the details of the PAN numbers of the users who are depositing the amounts in large numbers. These details have to be maintained for 50 days till December 30, 2016.

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In the similar way, people who are purchasing the Gold, Jewelry and more, in the form of cash has to submit their PAN details. Merchants will collect these details from the customers while the purchasing is happened. In case of non-compliance severe actions will be taken against them.

The recent decision from the government is for scrapping the high denomination notes in India and flush out the black money and fake currency, which is killing the economy and growth in the country.

Revenue Secretary Hasmukh Adhia says “We will 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”. He also mentioned that these all transactions are filed by the depositors in the income tax returns. Any transactions were mismatch, suitable actions are taken and considered as the case of tax payment violation.

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In this scenario, the tax amount is included with the penalty of 200% of the tax payable will be charged under the sections of Income Tax Act.

The people who are working with small businesses, housewives, workers, and artists who are having the cash as the savings in their homes are no need to worry about Tax department inspections. Says Mr Adhia.

There will be no questioning and annoyance from the Income Tax Department for the Deposits up to Rs. 1.5 or Rs. 2 lakh. These amounts come under the taxable income.