New Delhi: The government has asked banks and post offices to report to the income tax department all deposits above Rs2.50 lakh in savings accounts, and more than Rs12.50 lakh in current accounts, made during the 50-day window provided to tender the scrapped Rs500 and Rs1000 notes.
As per a notification issued on Wednesday, banks, co-operative banks and post offices will have to report to the tax department cash deposits exceeding Rs50,000 in a single day or aggregating to more than Rs2.5 lakh during the period 9 November, to 30 December 2016. These entities will also have to report cash deposits during the period aggregating to Rs12.50 lakh or more, in one or more current account of a person.
The finance ministry has notified the amended Rule for filing of Annual Information Return (AIR) report by banking company, cooperative bank and post offices on account of aggregate cash deposits in one or more current account of a person.
Banks and post offices now have to file a statement of financial transaction in respect of these transactions on or before 31 January 2017, the notification said.
Earlier, they were required to report to the income tax department only when cash deposits in an account exceeded Rs10 lakh in one full year.
In view of apprehensions that large number of illegal or black money may sought to be converted into white during the window provided till 30 December, the revenue department has issued fresh set of instructions.
In a major assault on black money, counterfeit notes and terror financing, Prime Minister Narendra Modi had on 8 November announced demonetisation of high value currency notes of Rs1000/500 and asked the public to deposit them in banks by 30 December. Since then, seemingly unending queues of people trying to deposit and exchange their scrapped currency notes are being witnesses at banks and post offices.
Tax department officers are of the view that the 50-day window provided to people to deposit or exchange notes should not be misused and hence the need to keep a tab on such high value deposits.
Those depositing large amounts of unaccounted money will have to face the consequences under tax laws, which provide for a 30% tax, 12% interest and a 200% penalty.
“CBDT has brought two-fold amendment casting a reporting responsibility on the taxpayer as well as the bank, thereby ensuring that bank doesn’t let go off the non-compliant taxpayers,” Nangia & Co managing partner Rakesh Nangia said.