What if someone deposits Rs.50,00,000. in the bank account and pay tax at special rate of 30%, showing the income under section 115BBE?
Will there be any penalty of 200% as per the new laws on Demonetisation of currency,
Please Reply ASAP.
CA Niraj Jain (Chartered Accountant) (44 Points)
12 November 2016What if someone deposits Rs.50,00,000. in the bank account and pay tax at special rate of 30%, showing the income under section 115BBE?
Will there be any penalty of 200% as per the new laws on Demonetisation of currency,
Please Reply ASAP.
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160327 Points)
Replied 12 November 2016
Section 115BBE: This section is one of the harsh sections of the income tax act. Once it is proved that the cash deposit is cash credit under section 68, and then it shall levy the tax rate of flat 30% without even providing the basic exemption limit.
The penalty under section 270A: Once it is proved that you are a mischief, then penalty provision under income tax act would automatically come into the picture. The AO shall use the section 270A, to levy the penalty of 200%.
However, the penalty of 200% under section 270A can only be levied if any of the conditions is fulfilled:
Misrepresentation or suppression of facts.
Failure to record investments in the books of account.
The claim of expenditure not substantiated by any evidence.
Recording of any false entry in the books of account.
Failure to record any receipt in books of account having a bearing on total income.
CA Niraj Jain
(Chartered Accountant)
(44 Points)
Replied 12 November 2016
That means suo moto returning of Income u/s 115BBE ultimately will lead to section 270A now?
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160327 Points)
Replied 12 November 2016
May very case to case, but regorous verification likely before application of section 270A.
harshil
(article)
(23 Points)
Replied 12 November 2016
can we offer the business income under section 44AD and offer tax at above 8.5%
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160327 Points)
Replied 12 November 2016
@ Harshil: If its eligible business, and of course, eligible assessee, then why not?
CA Niraj Jain
(Chartered Accountant)
(44 Points)
Replied 12 November 2016
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160327 Points)
Replied 12 November 2016
I have replied to that effect only. But an accountant clearly understands difference between turnover and (presumed) income.
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