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50% tax on unaccounted deposits
Keeping in mind, the black money being transferred into poor people accounts and receiving cheques from them, the Centre is considering to impose 50% tax on unexplained bank deposits, along with a 4-year lock in period for half of the remaining amount under the amendments to tax law the government plans to bring in parliament shortly.
However, a higher 90% tax and penalty could be imposed if assessees do not declare the unaccounted cash voluntarily.
Cash deposits made using the demonetized Rs. 1000 and Rs. 500 notes above a threshold that are declared to Income Tax authorities may attract 50% tax, as per the amendment to the Income Tax Act approved by the Cabinet last night.
Half of the remaining deposits, or 25% of the original deposits, will not be allowed to be withdrawn for 4 years, sources said.
