Do Not Deposit Above 2.5 Lakhs!

Are you rushing in a hurry to deposit the stacks of cash in banks exchanging the old demonetized currency notes with new notes? Then you might be in trouble. PM Narendra Modi’s primary motto of zero valuing the existing 500 and 100 currency notes is to bring out the black money. So, the government is likely to scan all the cash deposits above Rs. 2.5 Lakhs made in the banks.

‘Government would consider a serious parameter on deposited money by all account holders till 30th December. We would be getting reports of all cash deposited during the period of November 10 to December 30, 2016, above a threshold of Rs. 2.5 Lakhs in every account. The department would do matching of this with income returns filed by the depositors and suitable action may follow. This would be treated as a case of tax evasion and the tax amount plus a penalty of 200 per cent of the tax payable would be levied as per the Section 270(A) of the Income Tax Act,’ Revenue Secretary Hashmukh Adhia said.

‘Small businessmen, housewives, artisans and workers who had some cash lying as their savings at home should not be worried about any tax department scrutiny. Such group of people... need not worry about such small amount of deposits up to Rs. 1.5 or 2 lakh since it would be below the taxable income. There will be no harassment by the Income Tax Department for such small deposits made,’ he further said.

Resorting to conversion of liquid cash into gold or jewellery, persons doing this should provide the PAN number.

‘Instructions are issued to the field authorities to check with all the jewelers to ensure 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 would be scrutinised against the sales made, whether they have taken the PAN number of the buyer or not will also be checked,’ he added.