Effect of Declaring Cash Deposits in Current year Income Tax Return in India for Financial year 2016-17
Key Points of declaring Cash Deposits in Banks due to Demonetization in Current year Income Tax Return as Income of Financial Year 2016-17
- Source of Income needs to be explained :- One has to explain the source of income and manner of deriving the income and period in which it was derived
- Wealth Tax Proceedings : – If cash deposited in bank cannot be proved to be current year’s income and found to be accumulated from past years also, Wealth Tax proceedings can be reopened.
- Sharing of disclosure with Other departments :– Details of cash deposit would be made available by Income Tax Department to other agencies. Departments dealing with indirect taxes. VAT/Service Tax/Excise dept. may launch proceedings for suppression of sales and evasion of indirect taxes
- Penalty of Section 271D :- ofIf property sale proceed received in black money is declared, section 269SS would be attracted and assessee would liable to penalty under section 271D.
- No benefit of Slab rate & Deductions allowed – Pay Tax @ 30% With interest and Penalty if the Income declared is from unaccounted money. Read How much Taxes to be Paid if you Deposit Undisclosed Income in Bank Account Thus one would incur huge interest liability if declared amount cannot be proved as current income and found as past income.
- Pay Advance Tax :- Entire amount of advance tax on amount deposited in bank and to be declared in Income Tax return of FY 2016-17 will have to be paid latest by 31.03.2017
- Applicability of Other Income Tax Provisions : Read Post Cash Deposit in Bank- Take care of Income Tax Provisions of India
Notice from Income Tax to Taxpayers : Intimate Cash in Hand on 08.11.2016