The Central Government has developed a way for the tax cheats to disclose their unaccounted money and still get to keep a share on it. The Union Cabinet on Friday night approved a modification to the Income Tax Act which would charge 50 percent tax on disclosing inexplicable bank deposits using the old currency notes of Rs 500 and Rs 1000.
The new rule is applicable only till December 30 with a four year lock-in period for the unaccounted cash, meaning the accumulators can get half their money back after a period of four years if they disclose their illegal deposit.
The Government however has also said that there will be higher penalties of imposing 90 percent of tax for the candidates those who are voluntarily disclosing their unaccounted cash. This is the latest move from Government following the government’s decision to ban the old 500 and 1000 notes. The cash deposits have been increased after the Government announced the demonetisation. Already Rs 20,000 crore amounts had credited in Pradhan Mantri Jan Dhan Yojna accounts.
As per the latest modification, cash deposits made with the banned Rs 500 and Rs 1,000 notes above the amount originally declared to the Income Tax Departments may attract 50 percent tax. Reports said that the lawbreaker subsequently cannot withdraw the remaining half or 25 percent of the original deposit until four years after detection.
The Government on November 8 had already announced a 50-day period for people to exchange or deposit old 500 and 1000 notes. The changes approved by the Government have already been sent to the President for his assent and will possibly be introduced in parliament next week.