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.
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.