Rs 500, Rs 1000 notes ban: Rushing to banks with your Rs 500 and Rs 1000 notes? Here is an income tax alert for you. PM Narendra Modi has banned these notes and thereby set off a a wild chase across India by panicked people to rush to banks and post offices to exchange the barred currency for lower denomination notes which are still legal tender. What you should know is that the government has also issued an alert that the data with the banks will be scanned by the Income Tax department and the taxman will match the same with your income tax returns filed previously. According to the statement by the authorities, of especial interest will be the data that provides information about who has deposited cash worth over Rs 250,000 between the dates November 10 to December 30 (it is unclear yet if lower amounts deposited will be scanned too). If people have filed their returns dishonestly, then they will be caught and hauled up by the authorities for an explanation. If the answers do not add up, then they may get tagged as tax evaders and will be punished for it suitably.
The immediate penalty will be that the amount due will be taken by the state and to that will be dded a penalty of 200% on the real amount due. Remember, this is being done to get rid of black money in India and as such is a very welcome step. Here below we are providing the table according to the bracket that each individual must pay. It is very comprehensive and must be checked by all concerned to find out what will happen to their case. It will allow people to sleep much more comfortably as it will shake off all fears of having made a mistake somewhere.
It will definitely save you from a notice from the Income Tax department asking you for an explanation. Lastly, be warned, in case of wrongdoing, you may even get sent to jail! So, read on:
Note: Deposits of over Rs 10 lakh that do not match with I-T returns will be treated as a case of tax evasion and the tax amount plus a penalty of 200% of the tax payable would be levied as per Section 270 (A) of the Income Tax Act, 1961.
Note: Cess not included
While the above is what you must focus on, elsewhere, the country is seeing long lines at ATM booths, which have opened after being closed on PM Modi ‘s order. The same lines were seen yesterday in front of banks as panicked people brought their Rs 500 and Rs 1000 notes to exchange for smaller denomination notes.