Recently Modi govt banned 500 or 1000 INR Notes so now everyone are in confusion how to deposit the cash amount in your bank account. even they announced that whose person deposit more than 2.5 lakh cash in a bank account between 10th Nov to 30th Dec 2016 then your account data has been forwarded to the Income tax department. so Let’s learn how to deposit above 2.5 lakh cash in your bank account.
The people are rushing to Banks and ATM to exchange their hard earned money as the last date for exchanging the money is 30th December 2016. The amount will have to be deposited in the bank account for exchanging a high-value currency. It will definitely bring the money under the scanner of the banks and the Income Tax authorities.
Must Watch This Video Also on Practical : How to Deposit above 2.5 lakh Cash in your Account
Under section 270A of IT Act a penalty of 200% will be applicable when there is:
- Failure in recording of investment
- Furnishing any false entry in books
- Omitted to record receipt, having a bearing on total income
- Misstatement or suppression of facts; intentional non-disclosure
In the announcement the government has declared that if a person deposits cash above Rs. 2.5 lakh till 30th December then it can be taxed and a penalty of 200% will apply to these deposits if does not match the income declared in the previous Income tax return.
The revenue secretary stated that they will be getting reports of all cash deposited till 30th December which is above the limit of Rs. 2.5 lakh in every account and they will match the amount to the previous income tax returns filed by him. If they do not match then there will be suitable action against him.
Penalty as Per the Cash Deposited
|S. No.||Cash Deposited||Penalty|
|1.||up to 2.5 lakh||You do not have to worry as you can easily exchange Cash up to 2.5 in banks and will attract no penalty.|
|2.||to 10 lakh||If the money is obtained through a legal source and justification is made upon it then they are safe. Although the government has an eye on you but a low probability of a penalty of 200%.|
|3.||up to 50 lakh||This will definitely attract the Income authorities. If the amount does not match with the previous return filed or tax evasion is there then you can be taxed up to 200% under section 270A.|
|4.||Above 50 lakh||Here you should have a strong justification for the income and its source. If you don’t give source then a penalty of 200% shall be imposed.|
Points to Remember While Depositing Cash more than 2.5 lakh
The person depositing the money should have some points in his mind while depositing the money in their account:
- Only deposit when you can state the source of the income. As the government is planning to remove the black money from the country they are going to be very strict. You cannot deposit money without falling under the scrutiny of income tax authorities without having a source.
- You cannot escape the liability by paying the taxes and then depositing the money. The income tax authorities are keeping eye on the deposits and the Income tax returns filed. If any misreporting is filed or tax evasion is done then it will attract 200% of penalty.
- If you are a small businessman, housewife or freelancers and you have cash in hand which you have saved or earned on daily basis they do not need to worry about the assessment if the amount deposited by you is below 3 to 4 lakh.
- If you think buying gold, bullion is your solution then it is not as for buying Gold and bullion PAN number is mandatory. Also, the government in other announcement has made it clear that they have instructed the authorities to check all jewelers to ensure the fulfillment of this condition. If they fail the give the PAN number action will be taken against them. Even in the case of sales made it will be checked whether they have taken buyer’s PAN or not.
- If you have black money then there is no immunity. PM has already given an opportunity to disclose their money with illegal sources or unaccounted money under the under Income Declaration Scheme (IDS).
You don’t have to panic and deposit your money in the account tension free. This is a very crucial and bold step to make our country more transparent and to curb the problem of black money in India. I know we have to face some problems but our country is in the process of becoming a powerful and transparent country. It will take some time but will benefit us only in future.