Replies given by Revenue Secretary Dr. Hasmukh Adhia on the questions relating to action by Income Tax Department in respect of old currency deposited in banks .
Q.1 A lot of small businessmen, housewives, artisans, workers may have some cash lying as their savings at home, will the income tax department ask questions if the same is deposited in banks?
A.1: Such group of people as mentioned in the question need not worry about such small amount of deposits up to Rs.1.5 or 2 lacs, since it would be below the taxable income. There will be no harassment by Income Tax Department for such small deposits made.
Q.2: 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 lacs will only continue?
A.2: We would be getting reports of all cash deposited during the period of 10th November to 30th December,2016 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.
Q.3: Suppose the department finds that huge amount of cash above Rs.10 lacs is deposited in a bank account, which is not matching with the income declared, what would be the tax and penalty to be paid on the same?
A.3: This would be treated as the case of tax evasion and the tax amount plus a penalty of 200% of the tax payable would be levied as per the section 270(A) of the income tax Act
Q.4: It is believed that a lot of people are buying jewelry now, how does department plan to tackle this?
A.4: The 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 would be scrutinized against the sales made, whether they have taken the PAN number of the buyer or not will also be checked.
I-T Dept to keep record of deposits over Rs 2 lakh--This is news published in Business Standard on 9th of Nov 2016
With demonetisation of Rs 500 and Rs 1,000 currency notes, the government has directed Income-Tax Department to coordinate with all banks and furnish details of individuals who exchange cash amount of Rs 2 lakh and above.
“A key reason for scrapping these two currency denominations is to curb the huge menace of fake currency, tackle black money and make India a cashless economy,” said a senior I-T department official.
The object was also to make Indians tax complaint, which will eventually lead to higher revenues for government, he added.
The tax department has been asked to keep record of every individual along with his/her PAN card details and tally it with the tax filing. Accordingly, the department will impose penalty, which could be between 30 per cent and 120 per cent, depending on the source of income.
India has physical cash circulation of Rs 17 lakh crore, of which 88 per cent is Rs 500 and Rs 1,000 notes. Official data suggest that 40 per cent of black money is generated in real estate, while stock market and bullion transactions are other big sources.
Estimated total value of gold in India at 25,000 tonnes is Rs 70 lakh crore. India imports 750-1,000 tonnes of gold every year.
Among the key reasons that triggered the move was the moderate response to Income Declaration Scheme (IDS), which charged a one-time effective tax rate of 45 per cent on undisclosed income or property, giving a chance to domestic taxpayers to declare undisclosed income or assets by September 30. The scheme offered immunity from prosecution under the Income Tax Act, Wealth Tax Act and Benami Transactions (Prohibition) Act.
According to estimates, the government collected only Rs 65,250 crore, resulting in tax revenue of Rs 30,000 crore, about 0.2 per cent of GDP. The government has also tried to deal with the currency problem where 250 out of every 1 million notes are found fake, according to the data submitted by the Union Home Ministry to Parliament on May 3.
In 2015, investigative agencies and the Reserve Bank of India had recovered 632,000 fake currency notes with a value of Rs 30.43 crore. In 2015, various intelligence agencies filed 788 cases of smuggling and circulation of fake currency notes, in which at least 816 people were accused. It has been learnt that Delhi and Uttar Pradesh together accounted for over 43 per cent of fake currency recovered.
Appeal to Bankers--
From tomorrow you may get some illegal appeal directly or indirectly to Launder Black money
e.g. --exchange the currency in others name
----accept false KYC
--------OPEN false Cust ID with forged KYC Document etc..
But do not encourage them knowingly or unknowing..
SURELY you will be fixed accountable as there is a *mega trapping operation*is going on...
Information circulated in whatsapp...
THE PERSON asking the you to help in Money Laundering.. can be from CENTRAL VIGILANCE COMMISSION..
so do not FALL in the TRAP
YOU should never place your Hard Earned Job at RISK
Guidelines issued to banks by RBI for exchange notes submitted by public
Some Important points to be remember for coming days
● BM to ensure to manage the crowd, inform to local police for arrangement in written.
● All staff (wearing ID cards)to be engaged in exchange job, no back office work. Branches may take help of local Staff pensioners to manage the crowd.
●No lunch hours tomorrow. You can manage yourself.
● CCTV of Branch or ATM to be functional.
● One Exchange form will be accepted from one customer with original valid ID Proof.
● Avoid arguments with customers/no reply to media.
● Arrange to print & place minimum 500 copies of exchange form at various counters in the Branch.
● BMs are advised to keep 2-3 copies of RBI guidelines/circulars to convince the irritated customers, if any.
● The required currency of 100/- to be made available by today evening from the link branches.
● All the cash of 500/- & 1000/- to be deposited in the link branches.
● Withdrawals will be given more priority than exchanges.
● BMs to be updated with regular instructions from controllers time to time on whatsapp, mails or phones etc.
● All the exchange forms to be recorded in a register daily after close of working hours.
● While accepting the notes of 500/- & 1000/- , be attentive about quality of the note.
● Transaction Limits:
- Deposits
KYC complaint a/c- no limit
Non KYC- Below 50000/-
- Withdrawls
10000/- per day
20000/- per week
- Exchange
4000/- per head
●
Guidelines issued to banks by RBI for exchange notes submitted by public
Some Important points to be remember for coming days
● BM to ensure to manage the crowd, inform to local police for arrangement in written.
● All staff (wearing ID cards)to be engaged in exchange job, no back office work. Branches may take help of local Staff pensioners to manage the crowd.
●No lunch hours tomorrow. You can manage yourself.
● CCTV of Branch or ATM to be functional.
● One Exchange form will be accepted from one customer with original valid ID Proof.
● Avoid arguments with customers/no reply to media.
● Arrange to print & place minimum 500 copies of exchange form at various counters in the Branch.
● BMs are advised to keep 2-3 copies of RBI guidelines/circulars to convince the irritated customers, if any.
● The required currency of 100/- to be made available by today evening from the link branches.
● All the cash of 500/- & 1000/- to be deposited in the link branches.
● Withdrawals will be given more priority than exchanges.
● BMs to be updated with regular instructions from controllers time to time on whatsapp, mails or phones etc.
● All the exchange forms to be recorded in a register daily after close of working hours.
● While accepting the notes of 500/- & 1000/- , be attentive about quality of the note.
● Transaction Limits:
- Deposits
KYC complaint a/c- no limit
Non KYC- Below 50000/-
- Withdrawls
10000/- per day
20000/- per week
- Exchange
4000/- per head
●
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