Unaccounted Deposits: 50% Tax, 4 Yrs Lock In

To eliminate the abuse of current Income Tax laws, in the light of demonetization announcement by Prime Minister Narendra Modi, the cabinet has cleared new amendments to existing laws. These amendments will now charge a minimum of 50 per cent tax on unaccounted bank deposits made with banned Rs. 500 and 1,000 notes up to December 30 and half of the remaining deposit (that is 25% of unaccounted cash) will be locked in banks for four years without permitting for withdrawal.

If assesses fails to declare this cash voluntarily within the given date, as high as 90% tax and penalty will be imposed when Income Tax authorities discover them. If this unaccounted cash seized in raids is goes unexplained, the fine will be as high as more than 60%. The new Government scheme of Pradhan Mantri Garib Kalyan Yojana is also proposed allowing the old currency Black Money deposits with 50% penalty. 

With an intention to uproot the corruption, cabinet approved these amendments to present Income Tax Act. Government officials say, this is the right time for Black Money holders to declare the unaccounted wealth before Income Tax laws get further tightened.