Income tax Exemption Limit before cash deposit of 2.5 Lakhs in Bank Accounts

Post Demonetization, those who had cash savings at their home are now depositing the it in the bank and as the limit has been set at 2.5 lacs there is a lot of confusion over the income tax compliance process. People think that by depositing 2.5 lacs the bank account holder can earn basic income tax exemption. However, this would not be the case if this deposit is counted as income tax for the current financial year. It is important to understand the concept properly before depositing the money in the bank account and expecting an income tax limit. No…

Aadhaar Card Can Now Be Used For Banking Transactions

Individuals holding Aadhaar Card will soon be able to use their cards to debit or credit money. Ajay Bhushan, CEO of Unique Identification Authority of India(UIDAI) said that the move  will be taken to support the cashless economy appeal of the government. In order to avail the service, the Aadhar card holders will enter their Aadhaar ID number and thereafter fingerprint of iris identification will be done for electronic transaction. Further the bio metric capacity of Aadhaar will be enhanced from the current 10 crore to 40 crore a day. The…

Idle PF Accounts To earn Interest

In a big relief to Provident fund account holders, Union Labor minister announced that now idle PF accounts will earn the interest rate. There are around 10 crore employees who have PF funds account and the ministry has decided that if the money deposited in these accounts and is kept idle for more than 36 months then it will earn interest. Interest On Idle Accounts Since 2011, the inoperative or idle PF account did not earn any interest and if there has been no contribution during the past 36 months, the account were classified as inoperative.…

No Tax On Gold in The Income Tax Amendment Act

An Income Tax amendment bill was introduced in the Parliament through which the government is looking to eliminate the shortcomings in the existing income tax act which has been misused by those hoarding black money. Demonetization has wiped out black money from the system massively and Income tax amendment is the next step in this regard. Amendments Proposed In The Income Tax Act India is the world's second biggest gold buyer and is estimated that around one-third of the annual demand is approximately 1,000 tonnes. A large amount to buy…

e-Service Tax On Overseas e-commerce Companies Comes into Effect

Government has made a major change in the indirect tax which is now being implemented. From now on the customers who buy products from various foreign websites, including online games, e-books, software and various other intangible products will now have to pay higher tax. The government has levied 15% tax on all such purchases which means that the new price will be inclusive of 15% tax levied by the government. Nature Of the Tax: Regrading this, Central Board of Excise and Customs issued notification stating that e-service Tax will now be…

Demonetisation and Its Impact On Real Estate Sector

Demonetization And Its Impact On Real Estate Sector: Demonetization has sparked unwarranted fear in the mind of many who did not understand the concept quite well. Real Estate is one sector that has been supposedly hit the hardest but in the long run the fear does not seem to be a very rational. There are various positive impacts on the real estate sector post demonetization. The impact of demonetization on real estate sector should be seen from short, long as well as medium term perspective. Slowdown in the short term There is no doubt…

Summons to Assessee under section 131(1A) of the Income tax Act 1961

The Income tax department can issue summons under section 131(1A) which gives  powers given to the income-tax authorities under section 131(1) are powers of the court of law. While exercising these powers, the income-tax authorities act in a quasi-judicial capacity. These powers must be exercise drastically for the purposes set out in section 131(1) of the Act and not for any extraneous purposes. The powers under section 131 can be exercised only if proceedings are pending before the authority concerned under the Income-tax Act. The same is the…

Cash withdrawal for purpose of celebration of wedding

Cash withdrawal for purpose of celebration of wedding: Withdrawal of Legal Tender Character of existing ₹ 500/- and ₹ 1000/- Specified Bank Notes (SBNs) – Cash withdrawal for purpose of celebration of wedding With a view to enable members of the public to perform and celebrate weddings of their wards it has been decided to allow higher limits of cash withdrawals from their bank deposit accounts to meet wedding related expenses. Yet, banks should encourage families to incur wedding expenses through non-cash means viz. cheques /drafts, credit/debit…

Compliance with provisions of 114B of the Income Tax Rules, 1962 for Note exchange

Compliance with provisions of 114B of the Income Tax Rules, 1962: Anybody depositing more than ₹ 50,000/- in cash in their bank account has to submit a copy of the PAN card in case the bank account is not seeded with PAN In addition to the above provision, in the same IT Rules, PAN reporting requirements are there for other transactions, which banks need to insist upon. 2. The banks are, therefore, advised to take note of the above and ensure strict compliance with the provisions of 114B of the Income Tax Rules, 1962. Relevant provision…