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Penalty for unaccounted income could range from 50% to 200% of evaded tax If you are one with a hoard of cash in your hand, you should deposit that in banks only if you are able to account for the source of income, says tax experts. Depositing unaccounted money into banks would open up one to scrutiny by the income-tax (I-T) department, though some consultants said it might be worth a chance.  “One should be in a position to match the cash in hand with income from business operations,” said Pallav Pradyumn Narang, partner, Arkay & Arkay, a Delhi-based chartered accountancy firm. Businesses would have barely four months in the current financial year to justify the cash hoard as business income. Alternatively, they should be in a position to establish that the cash was withdrawn for business purpose.  If the amount is unaccounted for, various provisions of Income-Tax Act, 1961, will come into effect. “If the sources of income are unaccounted for, these would be deemed to be...

MUMBAI: Banks are putting in place a backend network to obtain details of people using the window open till December 31 for exchange of high-value notes, and share them with enforcement agencies like the Income Tax department, said two people working on such systems.  “The tax department will get a lot of information,” a banker said on condition of anonymity. “Bankers will have a lot of administrative work to do as they have to collect the Aadhaar and PAN details of people depositing money for exchange.”  We are asking customers to furnish PAN details for deposits of over Rs 10,000 during the demonetisation process,” another banker said on condition of anonymity. “A copy of Aadhaar or PAN will be required if customers want to exchange currency notes.”  The government’s latest announcement is a follow through of its measures against black money post the September 30 deadline for the Income Declaration Scheme, which unearthed Rs 65,000 crore.  There are reporting requ...

Banks to remain open this weekend Black money holders will not get any relief from the existing provision of up to 90 per cent tax on unaccounted income for cash deposits above Rs 2.5 lakh. The finance ministry on Wednesday warned that any mismatch between the deposited sum and income declared would attract up to 30 per cent income tax and 200 per cent of tax liability as penalty. Also, jewellers not furnishing the permanent account number (PAN) of buyers would face action, the ministry cautioned, even as there was rush to buy gold on Wednesday. “It should be clear that it’s no immunity scheme. This (deposit) does not provide any relief from taxation. The law of the land will apply (on source of fund),” Finance Minister Arun Jaitley said.  Explaining it further, Revenue Secretary Hasmukh Adhia tweeted: “We would be getting reports of all cash deposited during the period of November 10 to December 30, 2016, above a threshold of Rs 2.5 lakh in every account. The (tax) department wou...

Robust collections in personal income tax and excise duty The government’s revenue collection in April to October saw indirect tax-mop up growing at an impressive 26.7 per cent while that of direct tax came in at 10.6 per cent.   The total direct and indirect tax collections at the end of October stood at Rs 8.62 lakh crore, more than half the Rs 16.26 lakh crore target for 2016-17. The government is eyeing 12.64 per cent growth in direct tax at Rs 8.47 lakh crore for the current fiscal and 10.8 per cent in indirect tax at Rs 7.79 lakh crore. Direct tax mop-up touched Rs 3.77 lakh crore and indirect tax revenue stood at Rs 4.85 lakh crore during April-October, led by robust collections in personal income tax and excise duty, respectively.   Direct tax revenue includes corporate and personal income tax. Indirect tax takes into account mobilisation from excise, service tax and Customs duty. The gross collection of corporate income tax (CIT) grew at 11.6 per cent while under per...