Active Stocks
Thu Mar 28 2024 14:09:24
  1. Tata Steel share price
  2. 155.95 2.03%
  1. HDFC Bank share price
  2. 1,456.40 1.09%
  1. ITC share price
  2. 431.00 0.70%
  1. Power Grid Corporation Of India share price
  2. 277.70 2.45%
  1. State Bank Of India share price
  2. 756.35 3.04%
Business News/ Politics / Policy/  Cash deposits made before demonetisation also under tax department lens
BackBack

Cash deposits made before demonetisation also under tax department lens

Banks and post offices have been asked to report cash deposits in bank accounts for the period of 1 April to 9 November

For current accounts, all cash deposits aggregating to Rs12.5 lakh or more have to be reported to the tax department by the banks. Photo: Pradeep Gaur/MintPremium
For current accounts, all cash deposits aggregating to Rs12.5 lakh or more have to be reported to the tax department by the banks. Photo: Pradeep Gaur/Mint

New Delhi: Stepping up scrutiny of cash deposits, the income-tax department has mandated banks to report cash deposits in bank accounts for the period before demonetisation as well.

Banks and post offices have been asked to report cash deposits in bank accounts for the period of 1 April to 9 November, in addition to the earlier mandate of reporting all cash deposits between 9 November to 30 December, the tax department said in a press release.

Following amendments to the reporting requirements, banks and post offices will have to report all cash deposits during the period aggregating to Rs2.5 lakh or more in one or more bank accounts of an individual. For current accounts, all cash deposits aggregating to Rs12.5 lakh or more have to be reported to the income-tax department by the banks.

ALSO READ: Money has lost anonymity post demonetisation: Arun Jaitley

The increase in scrutiny comes at a time when a substantial amount of the old invalid notes have come back into the banking system till 30 December. Further, complicity of some bank officials in helping tax evaders to legalize their illegal income has forced the tax department to look into earlier cash deposits as well. There are fears that the bank officials may have fudged the books to pre-date some transactions.

Prime Minister Narendra Modi had declared that the old Rs500 and Rs1000 notes will be illegal tender with effect from 9 November and had asked citizens to deposit these notes in their bank accounts till 30 December. The government had initially estimated that only Rs11-12 trillion of these notes (as against Rs15-16 trillion in circulation) will come back into the banking system within this window with tax evaders having little choice but to not deposit these notes. But with tax evaders using conduits and various other means to legalize their black money, the tax department has been forced to step up its scrutiny of cash deposits.

ALSO READ: Parliamentary committee to question RBI governor Urjit Patel on cash crunch

Finance minister Arun Jaitley in a Facebook post on Sunday stressed that the deposit of a large amount of high denomination currency in banks does not render this money to be legitimate cash. “Black money does not change its colour merely because it is deposited in bank. On the contrary, it loses its anonymity and can now be identified with its owner. The Revenue Department would thus be entitled to tax this money. In any case, the amendment to the Income Tax Act itself provides that the said money, if voluntarily declared or if involuntarily detected, would be liable for differential and high rates of taxation and penalty," he said.

The tax department has also mandated that all bank accounts with the exception of basic savings bank accounts should have the permanent account number (PAN) or a declaration under form 60 for those who do not have a PAN by 28 February.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Politics News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 09 Jan 2017, 01:27 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App