A minimum of 50 per cent tax may be levied on unexplained bank deposits made using the banned currency notes up to December 30 along with a four-year lock in period for half of the remaining amount under the amendments to tax law the government plans to bring in Parliament shortly, reports PTI. However, a higher 90 per cent tax and penalty could be imposed if assessees do not declare the unaccounted cash voluntarily. Cash deposits made using the scrapped 500 and 1000 rupee notes above a threshold that are declared to Income Tax authorities may attract 50 per cent tax, as per the amendment to the Income Tax Act approved by the Cabinet last night.
Half of remaining deposits, or 25 per cent of the original deposit, will not be allowed to be withdrawn for four years, top sources said. In case such deposits are not declared and are detected by tax authorities, a total of 90 per cent tax and penalty would be charged, they said.
The government had after the shock demonetisation, given a 50-day window beginning November 10 for either depositing the 500 and 1000 rupee notes in circulation or exchanging them for new currency. While the exchange, which was limited to a maximum of Rs 2,000 per person, has been withdrawn, all old notes without any ceiling can be deposited in bank accounts.