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Without any tension pay the taxes and deposit cash (Less than 10 lakh rupees or more then 10 lakh rupees)

If you have earned money through honesty and hard work but you have not declared income then add this income in financial year 2016-17, file the IT return, pay 30% tax and deposit your money in the bank without any fear. The penalty will also be not levied.

S.No.

Section

Nature of default

Penalty Leviable

1

270A(1)

Under-reporting

And  is reporting of income

A sum equal to 50% of the amount Of tax payable on under-reported Income.

However, if under-reported income Is in consequence of any

Misreporting thereof by any person, The penalty shall be equal to 200%

Of the amount of tax payable on Under-reported income.

Income tax Section 270A has been introduced from 01/04/2016. If your real income is less than the declared income, then the tax penalty of 200% will not be imposed.

If the declared income and assessed income by IT department then the 50% of the amount of tax payable on under-reported income tax (difference between assessed income and declared income). But if you have black money(if under-reported income is in consequence of any misreporting) then 200% penalty of the tax calculated will have to be paid.

It’s not new that people depositing cash more than or equal to 10 lakh rupees in saving bank within one fin-year gets notice from income tax office.

People can deposit upto 10 lakh rupees without any tension on satisfying the following conditions.

1. The income which you will declare in the current financial year should match.

2. The tax amount x should be paid accordingly (x=10% on income greater than 2.5 lakh but less than 5.0 lakh +20% on income greater than 5.0 lakh but less than 10.00 lakh)

3. Now suppose A.O does not get satisfy on the source of income then section 270A will apply which has been inserted from 01/04/2016.

4. A sum equal to 50% of the amount of tax payable on under-reported income. i.e. [x + 50% of x]

5. However, if under-reported income is in consequence of any misreporting thereof by any person, the penalty shall be equal to 200% of the amount of tax payable on under- reported income. i.e. [x + 200% of x]

6. Either 4 or 5 will apply both can’t be applied at the same time.

Suppose today I deposit cash amount of old denominations of Rs. 10 lakh. I declare my income with proper source accordingly.

1. I will have to pay tax of Rs. 1,25,000.

2. If in case I gets notice from it department under section 270a (1% probability).

3. I will plea to the it department that my income is from genuine sources

4. Suppose the it department finds that it is misreporting income Ii will have to pay penalty 200% of tax which comes equal to Rs. 2,50,000.

5. So the total tax will come out to be Rs. 3,75,000.

6. So at least I am saving Rs. 6,25,000.

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Category Income Tax, Other Articles by - Mukesh Kuriyal 



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