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Home » Economy » Government proposes amendment to I-T Act: 4-year lock-in, 50% tax for unaccounted deposits

Government proposes amendment to I-T Act: 4-year lock-in, 50% tax for unaccounted deposits

By Newsd
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Central government proposes to introduce an amendment to the Income Tax Act in the Parliament that will enable it to levy a 50 percent tax on unaccounted bank deposits made using the banned currency notes up to December 30 along with a 4-year lock-in period for half of the remaining deposits.

Moreover, a higher rate of tax and penalty of 90 percent tax will be imposed on people who do not disclose their unaccounted cash voluntarily.

The Income Tax amendments approved by the Union Cabinet on Thursday night will be introduced in the ongoing session of the Parliament after seeking the President’s nod, Indian Express reported.

After the demonetisation move, the government has stated that cash deposits above the threshold of Rs 2.5 lakh will be under the scanner of Income Tax authorities.

As per the proposed amendment, cash deposits above the threshold may attract 50 percent tax and half of the remaining deposits will not be allowed to withdraw for four years, NDTV reported.

The additional taxes on the unaccounted and unexplained deposits will be utilized by government to create a fund to build rural infrastructure.

In the wake of demonetisation move, the deposits made in Jan Dhan accounts, particularly in zero-balance, have seen a surge of Rs 21,000 crore within two weeks. There have been allegations that tax evaders were using these accounts for conversion of black money to white.

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