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Deposits over Rs. 2.5 lakh to face tax, penalty on mismatch

Cash above Rs. 2.5 lakh deposited in banks following the scrapping of Rs. 500 and Rs. 1,000 notes could attract a tax and a 200 per cent penalty in case it is disproportionate to the account owner's income.
●    The banks have been asked to keep the details of PAN card of people depositing such large amounts over the 50-day window till December 30.  
●    Similarly, jewellers have been told to keep PAN details of people buying jewellery on cash. Action will be taken against them in case of non-compliance.
●    The government's move is the sequel to the scrapping of high denomination notes, meant to flush out black money and counterfeit currency.
●    In such a scenario, the tax amount plus a penalty of 200 per cent of the tax payable would be levied under the relevant sections of the Income Tax Act.
●    Deposits up to Rs. 1.5 or Rs. 2 lakh would be below taxable income. "There will be no harassment by the Income Tax Department for such small deposits made,".

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