The Govt has released replies given by Revenue Secretary regarding doubt raised by press reporters regarding banning of Rs 500 and Rs 1000 notes.The summary of these question/answer is given below.
From this clarification it is very much clear that govt will not collect data from bank for cash deposited in bank account during 10.11.2016 to 30.12.2016 for those cases where cash deposited is up to 2.5 lakh. So question of inquiry or scrutiny does not arise at all.
But here question is authentication of assurance given by Revenue secretary.Though the government has released a press note of question answer of press conference but it is not issued in the shape of circular.but in our view it shows at least intend of govt that they are after only big fish and not against AAM AADMI.
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.
Source: Simple Tax India
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