Recently the Cabinet has approved the amendment to the IT Act. As per the new law, the tax rate of 60 per cent may be levied on the previously undisclosed deposits. Also the amendment on the tax will be applicable to savings post November 8.
As per a report by CNBC- TV18, the recent announcement of a 200 per cent penalty on high-value deposits ran into trouble. There is no such provision in the Income Tax Act for imposing a 200 per cent penalty if the income has been declared and filed under the IT return norms. This further clarifies that there is no such provision under the act that bars people to make high-value deposits during the demonetisation period as long as the tax is paid for the same.
As per sources, the government was planning to bring an amendment to the Income Tax Act in the ongoing winter session of Parliament to impose a tax that will be higher than the earlier 45 per cent and penalty charged on black money disclosed in the one- time Income Disclosure Scheme, that ended on September 30.
For those who failed to utilise the tax return window, a much higher rate, as high as 60 per cent, was imposed that the foreign black money holders had paid during the last fiscal. Previously, the Income Tax Department had warned those with cash deposits above Rs 2.5 lakh limit post demonetisation decision, could attract tax plus a 200 per cent penalty in case of income mismatch.