Deposits above Rs 2.5 Lakh: Don’t worry if you receive Income Tax Department Notice

According to the orders passed by the Government, Income Tax Department has issued the notification regarding the depositing of more than Rs 2.5 Lakhs in the accounts. IT department said that it would send notices to those who have deposited above Rs 2.5 lakhs in the respective accounts and they can also submit proper documents and give an explanation regarding the cash.

Now, the recent notification of the Central Board of Direct Taxes (CBDT) asking banks to provide details of cash deposits above a particular amount has got worried about receiving notice from the Income Tax Department. Are you receive notice from IT department? Don’t worry if you are a perfect taxpayer.

The Government had already told to banks to provide details of candidates who deposit above Rs 2.5 lakh or more in savings accounts or fixed accounts between November 9 and December 30. It also asked about deposits of Rs 12.5 lakh or more in a current account. The notification also mentioned that PAN card is mandatory. If your deposits exceeding Rs 50000 on a single day, or above Rs 2.5 lakh in between November 9 to December 30.

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Amit Maheshwari, Partner, Ashok Maheshwari & Associates says, “If you receive a notice, don’t fear. Even if a notice is issued, it will ask the particular person to explain about income source. If satisfactory clarification is not provided, after that proceedings and penalties could follow.”

Divya Baweja, Partner, Deloitte Haskins and Sells said, “Notices send by I-T are just the starting point. The penalties, interest, etc. differ depending on the outcome of the proceedings.”

Never Filed Returns:

Through this, the person can receive notice under section 142(1). The individual is a prerequisite to filing the returns or produce proper records and information as claimed by assessing officer. If this is going to section 143(2), the candidate is mandatory to attend the proceedings or send his lawyer for it.

After that, if the assessing officer is satisfied with the explanations, clean chit will be issued. If not, he will state the difference between the reported income and actual income and calculate the tax demand. This order will support by a notice of application under section 156.

If the individual doesn’t obey with the notice, the officer will calculate the tax liability based on his valuation.

Deposits don’t match Returns

This leads to a notice under section 143(2). It suggests that your IT returns has selected for Enquiry. The officer may ask for account details and account books. Now the person is to get in touch with the assessing officer and submit the required data.

If your taxation is done, then you may receive notice under section 148. This is sent in cases where the officer has got proof to conclude that that individual has not revealed proper income in his return. If you are not fulfilling with this, you can also result in search and seizure. Nishit Dhruva, Managing partner, MDP and Partners said, “Notice under Section 148 can deliver within four years from the end of the relevant assessment year if the income that escaped assessment does not exceed Rs 1 lakh. And within six years from the end of the relevant assessment year if the income that escaped assessment is more than Rs 1 lakh”

Exemption from Penalty

After the announcement of demonetization, few tax experts have recommended that the tax laws provides an exemption from Penalty. If a person reveals his unaccounted income willingly and pays tax on it. This opinion holds that a person should declare income under sections 69(A), 69(B) and 69(C) that deal with particularly difficult cash credits, investments, and expenditure, etc., in the present financial year.

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