The Central Government on Wednesday said that cash deposits above Rs 2.5 lakh deposited till December 30 could attract tax plus a 200 per cent penalty in case of income mismatch (if the amount is not reflected in the tax returns).
Revenue secretary Hasmukh Adhia said: “We would be getting reports of all cash deposited during the period of 10th November to 30th December 2016 above a threshold of Rs 2.5 lakh in every account. The department will match this with income returns filed by the depositors. And suitable action may follow.”
Banks will allow customers to exchange notes up to a value of Rs 4,000 with the rest to be deposited in their existing bank accounts.
Adhia in a separate tweet also said that while farmers should not worry about cash deposits as their income was exempt, their deposits should match known yields of their acreage. Analysts said this was probably done as it was common for people to divert black money to farms and show it as farm income.
However, in recent months, the tax sleuths have started to match exceptionally high farm incomes against possible yields per acre. Cases were found where a five-acre farm was being shown to have earned up to Rs 5 crore in profits. (Agencies)