I-T dept asks banks to report deposits over Rs 2.5 lakh in 50-day window

Previously, banks were required to report to the I-T Department only when cash deposits in an account exceeded Rs 10 lakh in one full year.

By: PTI | New Delhi | Published:November 11, 2016 9:10 pm
Demonetisation, black money, Banks black money, black money banks, Demonetisation black money, Narendra Modi, Modi black money Those depositing large amounts of unaccounted money will have to face the consequences under tax laws, which provide for a 30 per cent tax, 12 per cent interest and a 200 per cent penalty.

Moving quickly to plug loopholes, the Income Tax Department has asked banks to report all cash deposits exceeding Rs 2.5 lakh during the 50-day window provided to tender the now-defunct 500 and 1000 rupee notes. Previously, banks were required to report to the I-T Department only when cash deposits in an account exceeded Rs 10 lakh in one full year. But in view of apprehensions that large number of illegal or black money may sought to be converted into white during the window provided till December 30, the Revenue Department has issued fresh set of instructions, a top official said.

“The attempt will be not to harass honest citizens who are free to tender all of their legal, old high-denomination
currency savings in their bank accounts and get new ones,” he said. But the window provided to them will also be not allowed to be misused, he said, adding that the Income Tax Department is keeping a close eye on all high-value deposits.

Those depositing large amounts of unaccounted money will have to face the consequences under tax laws, which provide for a 30 per cent tax, 12 per cent interest and a 200 per cent penalty. Earlier in the day, the Finance Ministry came out with newspaper advertisements assuring people that their hard earned money is safe and that depositing junked Rs 500/1,000 notes of up to Rs 2.50 lakh in bank accounts will not be reported to the tax department.

It also cautioned people against depositing the money of unknown people in their own accounts or falling prey to
cheats, thugs and rumour mongers. Besides, the ministry said, farm income continues to remain tax free and can be easily deposited in bank. Small businessmen, housewives, artisans, workers can also deposit cash in their accounts without any apprehensions, it added.

“Deposits up to Rs 2.50 lakh will not be reported to the Income Tax department. There will be no harassment or
investigation. All honest citizen need not worry. Farmers’ income is tax free and can be easily deposited in bank,” the ministry said in newspaper ads. In its biggest crackdown ever on black money, the government on Tuesday night announced demonetisation of Rs 500 and Rs 1,000 notes and asked people holding such notes to deposit them in their bank accounts.

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  1. A
    Anil
    Nov 11, 2016 at 8:14 pm
    Govt. should be keep an eye on gold purchases, religious trusts donations ( having political leanings ) and also district co-operative banks ( huge political leaning, for example: in Maharashtra and Kerala ). In Kerala itself, there is a suspect of 30k Crore black money, which the leftists, Congis and Muslim league are trying to push black money, into their party's co-operative banks, to convert.
    Reply
    1. D
      dd
      Nov 11, 2016 at 4:33 pm
      I-T should collect all account information whose balance is higher than last 1-3 year average balance...Should ask them to explain...This will help avoid common people help BLACK money owners...
      Reply
      1. V
        vinay
        Nov 11, 2016 at 4:27 pm
        Good time for Baba's and Godmen running Trusts and fake charities. lt;br/gt;They have 100's of crores in cash and are now using this opportunity to turn black into white (especially for political parties and big business ) . lt;br/gt;lt;br/gt;These fake trusts and charities are never questioned plus the donors are given tax deduction under 80G .
        Reply
        1. M
          mathimathi
          Nov 11, 2016 at 8:16 pm
          porkistani even get his a fake Aadhar card in rajasthan. Then How can Income Tax dept RAW IB prevent new fake Rs 2000 Rs 1000 Rs 500 from Porkistan if they print as counterfeit notes though it is easily identified from Mars..
          Reply
          1. S
            S Subramaniam
            Nov 11, 2016 at 4:49 pm
            Since the exchange of invalid 500/1000 notes is permissible to the extent based on proof of ideny - (1) Aadhar Card; (2) PAN Card; (3) Voted ID; (4) Pport; (5) Ration Card: CGHS ID; there is every possibility that an individual will frequent to different banks with different ID proof for exchanging the invalid 500/1000 notes to the maximum of Rs 4000.00 per transaction. To obviate this anamoly Government should insist that only the earning member of the family should be enled to exchange the invalid notes with one of the proof of ID. He or she should render a certificate that he or she is the earning member and has not exchangd the invalid notes against other IDs.
            Reply
            1. S
              S Subramaniam
              Nov 11, 2016 at 10:39 pm
              Yes, I agree. But how it will be ensured that every citizen does not exchange the invalid notes to the extent of Rs 4000 per proof of ID at different banks?
              Reply
              1. S
                sushil
                Nov 16, 2016 at 8:35 am
                what about people depositing their black money (less than 2.5 lakhs) in multiple accounts of their employees
                Reply
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