A salaried person has an income of Seven lakhs(7,00,000/-) , actually pays the tax on time.
He now owns the cash of (5,00,000/-) by saving the amount in the chit funds for 25 months.The Chit money is matured last month and he has the cash in hand now.
If the person choses to deposit the money in the bank, please let us know the penalty would be calculated ?
Now my questions are
1, He is in 20% tax slab and now , the additional cash transaction 5,00,000 lakhs would attract a penalty of 200% with 20% slab.
(i.e) 5,00,000 *0.20 = 1,00,000/- + (2*1,00,000) = 2,00,000
Total Tax with penalty adds upto 3,00,000/-
2. He is in 20% tax slab now and the additional cash transaction would push him to 30% category.
(i.e) 5,00,000 *0.30 = 1,50,000/- + (2*1,50,000) = 3,00,000
Total Tax with penalty adds upto 4,50,000/-
3. The cash transaction money would be calcualted in a separate slab with only 10%.
(i.e) Net taxable income = 5,00,000 - 2,50,000 =2,50,000/-
10% tax = 25,000
200% penalty on tax = (2,50,000*2) = 50,000
Total tax adds upto = 75,000/-
Please let us know, which one is correct ?
CAclubindia
