Govt to introduce new tax reforms to dig out undisclosed sum of money

The government may introduce an amendment to the Income Tax Act to address the issue of undisclosed amounts deposited in the Jan Dhan accounts.

NEW DELHI: The Union Cabinet in its meeting presided by Prime Minister Narendra Modi late on Thursday evening discussed the status of the rollout of demonetization, besides ways to tax the deposits in the Jan Dhan accounts of undisclosed income. The government may introduce an amendment to the Income Tax Act to address the issue of undisclosed amounts deposited in the Jan Dhan accounts.
The Cabinet meeting was held at the Parliament library on a day when the government announced stopping exchange of old currencies of high denominations from Thursday midnight. "The Cabinet took stock of the deposits in banks. It also discussed the issue of disproportionate Rs 21000 crores in the Jan Dhan accounts. West Bengal and Karnataka have reported most of such deposits. The Cabinet discussed various taxation options through amendment to the existing law to ensure that the unscrupulous elements don't take advantage of the Jan Dhan accounts of unsuspecting poor," sources said, while adding that the amendment bill to the IT Act may be brought as Money Bill in the Lok Sabha in the current session of Parliament.
The Cabinet is also learnt to have discussed the manner in which more than Rs 2.50 lakh is deposited in normal bank accounts after the announcement of demonetization on November 8 by the Prime Minister on the national television. Sources said that the current provision of 200 per cent penalty on undisclosed income deposited in bank accounts may led to people destroy the currencies.
The Cabinet, sources said, also discussed steps to encourage cashless transactions in the economy, with ministers apparently asked to encourage digital mode of payments in their domains.