75 % tax and 10 % penalty in case IT authorities detect undisclosed wealth deposited post demonetisation

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Modi government has decided to impose 75 % tax and 10 % penalty in case Income Tax authorities detect undisclosed wealth deposited post demonetisation, reports PTI.

This will include 30% tax on undiclosed income, 10% penalty and 33% surcharge. The government has reported included these provision sin the new Income Tax Amendment Bill.

75 % tax

The government had after the shock demonetisation, given a 50-day window beginning November 10 for either depositing the 500 and 1000 rupee notes in circulation or exchanging them for new currency.

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While the exchange, which was limited to a maximum of Rs 2,000 per person, has been withdrawn, all old notes without any ceiling can be deposited in bank accounts.

This, sources said, had led to a surge in bank deposits, particularly in zero-balance Jan Dhan accounts that swelled by over Rs 21,000 crore in just two weeks, raising suspicion that these accounts may have been used to launder black money.

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While the tax authorities had talked of levying a peak rate of tax and 200 per cent penalty on top of it for any unexplained deposit above Rs 2.5 lakh during November 10 to December 30 period, it was felt that such a move may not have legal backing.

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The government plans to bring the amendment for approval during the ongoing winter session of Parliament.

Sources said the demonetisation was a big step to uproot black money and corruption but its very purpose would have been defeated if the ill-gotten wealth made way into the system through benami deposits.

And taxing them was a way to punish dishonest people.

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