Government may amend laws to impose 200 per cent penalty on income mismatch

  |   India News

THE GOVERNMENT may move to amend tax laws to impose a 200-per cent penalty in case of income mismatch of deposits above the Rs 2.5-lakh threshold under the 50-day window for exchange of old Rs 500 and Rs 1000 currency notes, according to revenue officials.

A day after Prime Minister Narendra Modi announced the scrapping of the old currency notes on November 8, Revenue Secretary Hasmukh Adhia had said that cash deposits above the threshold not matching with tax returns will be treated as tax evasion and a 200 per cent penalty will be imposed under section 270(A) of Income Tax Act.

According to Amit Maheshwari, partner at Ashok Maheshwary & Associates LLP, if a taxpayer declares any cash as current year income under Section 68 of the Income-Tax Act, 1961, it will technically attract a 30 per cent tax, applicable surcharge and cess under section 115BBE.

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