TMI BlogBan on High Denomination Currency and Income-tax ActX X X X Extracts X X X X X X X X Extracts X X X X ..... Ban on High Denomination Currency and Income-tax Act - News and Press Release Dated:- 9-11-2016 - News - As the Government has declared that currency notes of ₹ 500 and ₹ 1,000 denominations will not be valid from midnight of November 8, 2016, citizens will have to surrender the old notes at any branch of a bank or post office. Citizens will have a time limit of 50 days (till 30 D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecember, 2016) to either replace the old notes with new ones or deposit the same into their bank or post office accounts. The limit for exchanging the old notes with new ones is set at ₹ 4,000. However, there is no such limit for depositing the old notes into bank or post office account. In other words, a person can deposit the old notes into his bank or post office account without any li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mit. Various provisions of Income-tax Act would play a vital role in achieving the objectives of this move to curb the black money as under: 1. Furnishing of PAN As per section 139A of the Income-tax Act, 1961 read with Rule 114B of the Income-tax Rules, 1962 , PAN is mandatory if a person wants to deposit cash of more than ₹ 50,000 into his bank account during any one da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Hence, a person who doesn t have PAN won t be able to deposit cash of more than ₹ 50,000 into his account. 2. Furnishing of information by Bank / Post office to Income-tax Department As per section 285BA of the Income-tax Act, 1961 , every bank or post office is required to furnish a statement of financial transaction or reportable account (commonly known as Annual Informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion return ) to Income-tax department in respect of cash deposit made by a person aggregating to ₹ 10 lakh or more in a financial year, in his one or more accounts. The limit is ₹ 50 lakh in case of current account. Hence, Banks or post offices pass information to income-tax department in respect of every person who deposit cash of more than ₹ 10 lakh in his accounts during a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial year. Hence, it is quite possible that on basis of information received from banks or post offices, Income-tax department may furnish notices to persons depositing cash of more than ₹ 10 lakh to explain the source of such deposit. 3. Penalty for concealment or misreporting of income As per section 271(1)(c) of the Income-tax Act , a taxpayers is penalized if he concea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls or furnish inaccurate particulars of his income. The penalty under section 271(1)(c) ranges between 100% to 300% of the tax sought to be evaded. section 271(1)(c) was substituted by section 270A by Finance Act, 2016 which provides for the penalty in case of misreporting or under reporting of income. The penalty is 50% of the tax payable on under-reported income and 200% of the tax pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yable on misreported income. Hence, if a person fails to disclose the source of the amount deposited in bank or post office account, he can be penalized under section 271(1)(C) or Section 270A , as the case may be. - News - Press release - PIB Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
