Small biz need not worry about deposits up to 1.5-2 lacs, as it is below taxable income: Dr Adhia

New Delhi, Nov 10 (KNN) Addressing the concerns of small businessmen, artisans, workers on speculations over income tax department asking questions department in respect of money deposited in banks, Revenue Secretary Dr Hansmukh Adhia said such group of people need not worry about such small amount of deposits up to 1.5 or 2 lacs, since it would be below the taxable income.

Dr Adhia replied to some questions relating to action by income tax department in respect of money deposited in banks in old currency

Q1  A lot of small businessmen, housewives, artisans, workers may have some cash lying as their savings at home, will the income tax department ask questions if the same is deposited in banks?

A!: Such group of people as mentioned in the question need not worry about such small amount of deposits up to 1.5 or 2 lacs, since it would be below the taxable income. There will be no harassment by income tax department for such small deposits made.

Q2: Will the Income Tax Department be getting reports of cash deposits made during this period? If so, will the current threshold of reporting requirement of reporting cash deposites of more than 10 lacs will only continue?

A2: We would be getting reports of all cash deposited during the period of 10th November to 30thDecember above a threshold of 2.5 lacs  in every account.  The department would do matching of this with income returns filled by the depositors. And suitable action may follow.

Q3: Suppose the department finds that huge amount of cash above 10 lacs is deposited in a bank account, which is not matching with the income declared, what would be the tax and penalty to be paid on the same?

A3: This would be treated as the case of tax evasion and the tax amount plus a penalty of 200% of the tax payable would be levied as per the section 270(A) of the income tax Act

Q4: It is believed that a lot of people are buying jewellery now, how does department plan to tackle this?

A4: The person who buys jewellery has to give his PAN number. We are issuing instructions to the field authorities to check with all the jewellers to ensure that this requirement is not compromised. Action will be taken against those jewellers who fail to take PAN numbers from such buyers. When the cash deposits of the jewellers would be scrutinized against the sales made, whether they have taken the PAN number of the buyer will also be checked.