Central Board of Direct Tax has asked the Banks to provide the details of those bank accounts that saw the cash deposit of more than Rs 2.5 lakhs. This decision has got people worried as they do not know what to do in case a notice from the Income tax department is sent to them. However, legitimate tax payers who have been filing their income tax returns do not need to worry.
Government has told banks that they should furnish all the details of Individuals who deposited Rs 2.5 lakh or above in savings account or fixed deposit between November 9 and December 30. Further, the current accounts that saw the incoming of over 12.5 lakhs in cash should also be reported to the authorities.
If the cash deposit is more than 2.5 lakhs in a single day or over Rs 2.5 lakh between November 9 and December 30, there should be Permanent account number (PAN) quoted. Anyone who receives notice should not panic as he/she will be asked to tell the source of income. Proof of such source of Income has to be attached along with the explanation and if the authorities find it insufficient, there could be action in the form of penalties, interests and so on.
Who can receive the Notice?
Never filed income tax return – Someone who has never filed an Income tax return can receive the notice under section 142(1). Assessing officer will ask the Individual to furnish relevant information and records. If notice under section 143(2) is also issued to the individual, he should attend the proceedings or send his accountant or lawyer on his behalf. Upon explanations, if the officer agrees to the what the person has to say the he will issue clean chit, else there will be discrepancy recorded between the reported income and actual income. Further, the tax will be calculated and order will be supported by a notice of demand under Section 156.
Cash Deposit post demonetisation
If Deposit don’t match return – In this case notice will be issued under Section 143(2) and that the person will have to provide his accounts for the detailed scrutiny. Under this notice, assessing officer may call for books of accounts and bank details. Taxpayer will have to meet the assessing officer to furnish all the proof that he has. After, the assessment is done, a notice will be issued under section 148. This notice in sent to the individual, in case an officer has some evidence to infer that person has concealed his income in his filing. In case you are not complying with the notice search and seizure could be the next step.
Immunity from Penalty – Experts stand divided over the issue as some of them believe that Tax law offer immunity if the person discloses his unaccounted income and pays voluntarily. An individual should declare income under Sections 69(A), 69(B) and 69(C) that deal with certain unexplained cash credits, investment, expenditure, etc., in the current financial year.
Second school of thought says that disproportionate income cannot be termed as income in the current financial year. The assessing officer can assume that the disproportionate income belongs to the previous year and go ahead with the proceedings.
The government has made itself very clear that no black money hoarder will be left loose and penalty will be imposed as per the liabilities.
