Union finance minister Arun Jaitley said that demonetisation of Rs 500 and Rs 1,000 currency notes is not an immunity scheme and indicated that high and suspicious deposits of money in the banks will be looked by income-tax department. He said the move will push India towards a cashless economy and for the first time people will realise that it is good to be an honest tax payer.
“There is a clear income tax law. This is not an immunity scheme. This is a scheme under which one set of currency has stopped to be a legal tender and is being replace. Therefore those who have lawful money with them have nothing to fear. Those who have unlawful money then certainly will be liable as far as tax laws is concerned,” said finance minister.
Revenue secretary Hasmukh Adhia said that government would get reports of all cash deposited between November 10 and December 30, 2016 above Rs 2.5 lakh in every account. The department would do matching of this with income returns filled by the depositors and suitable action may follow.
To a question that if department finds that huge amount of cash above Rs 10 lakh is deposited in a bank account, which is not matching with the income declared, secretary said: “This would be treated as the case of tax evasion and 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.”
He said that small businessmen, housewives, artisans, workers with less than Rs 2 lakh don’t need to worry. “Such group of people as mentioned in the question need not worry about such small amount of deposits up to Rs 1.5 or 2 lakh, since it would be below the taxable income. There will be no harassment by Income Tax Department for such small deposits made,” said Dr Adhia.
On dealing with problem of people buying gold to hide their blackmoney, he said person who buys jewellery has to give his PAN number. “We are issuing instructions to the field authorities to check with all the jewellers to ensure that this requirement is not compromised. Action will be taken against those jewellers who fail to take PAN numbers from such buyers. When the cash deposits of the jewellers would be scrutinised against the sales made, whether they have taken the PAN number of the buyer or not will also be checked,” he added.
On reports that there are people in markets who are exchanging Rs 1,000 notes by taking commission and Rs 50 and Rs 100 are sold at premium, Mr Jaitley said that these reports are “exaggerated.”
“Government and revenue department is keeping an eye on this. These reports are quite exaggerated. From yesterday midnight if someone coverts such notes (by taking commission), they too later on will have to account for, what is the source. So those who indulge in this trade are going to run a high risk,” said the finance minister.
Mr Jaitley said that demonetisation of Rs 500 and Rs 1,000 notes will expand the size of economy, increase revenue base and make the system cleaner while preserving its credibility. “The decision will expand the GDP and make (the economy) cleaner. It will push revenue and more money will come into the banking system”.
