Cash Deposit Limit in Bank – Rs. 2.5 Lakh– Beware Income Tax has an Eye

On November 8th, 2016, a historical decision has come to ban Rs. 500 and Rs. 1000 notes as a legal tender in India, after that there is going huge crisis, and confusion is going on everywhere. And, With the ongoing confusion, there is an alert Information is issued in an announcement regarding the cash deposit to be made by the Single person in the bank up to 30th December.

In the announcement, the Government has warned that Cash Deposits above Rs. 2.5 lakh during the 50 day period of returning Rs. 500 and Rs. 1000 notes could be taxed and over and above a 200% penalty would be applied to that deposits if that deposits would not match with the declared income in the last ITR.

We have to keep in mind the not so early PM Modi statement, “don’t blame me for any harsh steps,”

Finance Ministry, has given clear indication that whatever amount has been deposited in the bank account is open for tax scrutiny.

The Revenue Secretary in a statement said that “We would be getting reports of all cash deposited during the period of 10th November to 30th December above a threshold of Rs 2.5 lacs in every account. The department would do matching of this with income returns filled by the depositors. And suitable action may follow.”

We have 4 Points that you need to take care while depositing the money in the account –

• Deposit, If you can explain the Source
  It has been clearly indicated that Government is nowhere in a mood to spare the tax evaders, so while depositing the cash in the account you have to keep the source of the deposit in your mind as from the reforms and instructions it is clearly indicated that 80% cases would fall under Income Tax Scrutiny at a later date.
   
• Paying Tax and Deposit the money is not the only solution
  If you think that we would deposit the money and pay the tax according to the slab and government would spare you, so please beware, as this solution is not going to happen.
  The government is keeping abird eye on your cash deposit and already instructs the IT Department to closely monitor all the person filed ITR and disclosures, if any misreporting and income were escaping measure caught by them, the same will attract a penalty of 200%.
   
• Small Business, Housewives, freelancers do not need to worry
  Small Business, Housewives, freelancers, if they are having some cash in Hand which they save or earn in their daily life, would not need to worry about scrutiny and assessment.
  As whatever amount deposited by these persons are in any case id below the tax threshold limit or in a limit of Rs. 3 to 4 lakhs and the government has clearly indicated that they have their eye on big and medium fishes.
   
• Buying Gold, Bullion is not going to be the safe option
  For Buying Gold, Bullion PAN Number is mandatory, and In another announcement, the government has announced that they have clearly instructed the field authorities to check with all the Jewellers to ensure this requirement is not compromised.
  Action will be taken against those Jewellers who fail to take PAN numbers from such buyers. When the cash deposits of the Jewellers is scrutinised against the sales made, whether they have taken the PAN number of the buyer or not will also be checked.
   
• No Immunity for Black Money
  “Black money isn’t anyone’s basic right,” Jaitley said.
  PM has already appealed to masses to disclose the unaccounted money up to 30th September 2016 under Income Declaration Scheme (IDS) and also indicated that strong steps would be taken to eradicate black money if people don’t comply.

Conclusion

Do not panic, confused, try, to be honest, and deposit the amount without any fear if you are account for that. This step is the bold and historic step in the history of India, and this will help India to become a superpower in future. A country where black money is eradicated, and funding to political parties and intuitions become visible and transparent; that country will surely be a shining and powerful country.

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