Demonetisation: 60 per cent tax likely on undisclosed deposits
New Delhi: The Union Cabinet most likely to announce a major amendment in the IT Act under which 60 per cent tax would be applicable on the previously undisclosed deposits.
As parliament is in session, Prime Minister Narendra Modi on Thursday called an emergency cabinet meeting to discuss the amendment in the Income Tax (IT) Act.
Why amendment needed in IT Act?
- Government's earlier decision of levying a 200 per cent tax on undisclosed deposits post the demonetisation move does not come under the IT Act.
- There is no such provision of imposing a 200 per cent penalty if the income has been declared and filed under the Income Tax Return (ITR).
- Also, people were not approaching the banks to deposit old Rs 500 and Rs 1000 currency notes due to tax imposed as high as 200 per cent. Government wants that the old currency notes, black or white, should pass through a formal banking channel.
- Government had earlier announced a maximum of 45 per cent tax and penalty for those declaring their undisclosed income under the one- time Income Disclosure Scheme, that ended on September 30.
- Government now is committed towards imposing 60 per cent tax and penalty, which is higher than the previous 45 per cent.