Deposit More Then Rs 2.5 Lakh, Need to Pay 200% Tax Penality

The government warned on Wednesday that cash deposits more then Rs 2.5 lakh threshold under the 50-day window could attract tax plus a 200%  penalty in case of income mismatch.

All cash deposited during the period of November 10 to December 30, 2016, above a threshold of Rs 2.5 lakh in every account.

The Tax department would do matching of this with income returns filed by the depositors. And suitable action may follow.

This would be treated as a case of the tax amount plus a penalty of 200 per cent of the tax payable would be levied as per the Section 270(A) of the Income Tax Act.

The government has allowed citizens to deposit in their bank accounts old currency of Rs 500 and Rs 1,000 denominations, which had been declared invalid in the nation's biggest crackdown on black money, corruption and counterfeit notes, between November 10 and December 30.

Small businessmen, housewives, artisans and workers who had some cash lying as their savings at home should not be worried about any tax department scrutiny.

If you deposit less then Rs 2.5 lakhs, there is no tax. We can deposit normally without any tax, but we have to show any identity card like voter ID, aadhar card, pan card, driving licence or ration card.