I have Rs 20 lakh in my piggy bank. Will the taxman know if I deposit it?

The revenue secretary was among a whole battery of bureaucrats who worked the media to explain the demonetization order.

Published: 09th November 2016 11:15 PM  |   Last Updated: 09th November 2016 11:15 PM   |  A+A-


Indian currency of different denominations. |File Photo: Reuters

By Express News Service

NEW DELHI: The day after the Union government’s demonetization of Rs 500 and Rs 1000 notes set the cat among the pigeons, Union revenue secretary Dr Hasmukh Adhia spelled out clearly what’s on the cards for tax evaders should they harbor notions of dodging this googly.

The revenue secretary was among a whole battery of bureaucrats who worked the media on Wednesday to explain the fine print of the demonetization order to common citizens as well as hoarders of black money. Excerpts from Adhia’s responses to media questions.

 A lot of small businessmen, housewives, artisans, and workers may have cash lying with them at home. Will the Income Tax department ask questions if they deposit the money in banks now? 

Such people need not worry about small amounts of money, say up to Rs 2 lakh since it might be below the taxable income. There will be no harassment by Income Tax Department for such small deposits.

Will the IT Department get reports about the cash deposits made in the next few days? If so, will the current threshold of reporting only cash deposits of more than Rs.10 lakh continue?

We will get reports of all cash deposited during the period from November 10 to December 30 if the amount is more than Rs 2.5 lakh in any one account.  The department will match this with the income returns filled. And suitable action may follow.

Suppose the department finds that a huge amount of cash above Rs 10 lacs is deposited in a bank account, and does not match with the income declared, what would be the tax and the penalty to be paid?

That would be treated as a case of tax evasion.The tax amount plus a penalty of 200 percent of the tax payable would be levied as per Section 270(A) of the Income Tax Act.

 It is believed that a lot of people are buying jewelry now. How will department tackle this?

A person who buys jewelry has to give his PAN number. We are issuing instructions to the field authorities to check with all the jewelers to ensure that this requirement is not compromised. Action will be taken against those jewelers who fail to take PAN numbers from such buyers. When the cash deposits of the jewelers are scrutinized against the sales made, we will check whether they have taken the PAN number of the buyer or not.

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