Cash deposits above Rs 2.5 lakh could attract tax and penalty and authorities might take away 90% of your money if there is an income mismatch, according to a government decision on Wednesday. The mathematics is simple, during the transition government will have the details of your deposits of old notes. That will be easily be matched with your return income that you file into Income Tax Department.
Revenue secretary Hasmukh Adhia answers the four frequently asked questions:
A lot of small businessmen, housewives, artisans, workers may have some cash lying around as their savings at home. Will the income tax department ask questions if the same is deposited in banks?
Such group of people, as mentioned in the question, need not worry about such small amount of deposits up to Rs 1.5-2 lakh, since it would be below the taxable income. There will be no harassment by income tax department for such small deposits made.
Our Comment: But it will be accounted in your Financial Year Taxable Income. Where you cannot cut your own TDS? Housewives with that small amount may be feel safe, but people who are earning let say som what 5 Lacs a year and eventually they found they have old notes around 1.5 lac, then your gross income will be 6.5 lacs. So you have to pay your tax on this money eventually. Unless you have your wife account who is housewife. 🙂
Will the income tax department be getting reports of cash deposits made during this period? If so, will the current threshold of reporting requirement of reporting cash deposits of more than Rs 10 lakh will only continue?
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