Income tax Amendment Bill tabled in parliament
Finance Minister Arun Jaitley tabled the Income Tax Amendment Bill in the Lok Sabha amid chaos and protests in a bid to corner the ruling BJP government on the issue of demonetisation
The new amendments in the IT Act have been proposed to check measures that people are adopting to evade tax after government kick-started demonetisation of Rs 500 and Rs 1000 notes.
there may not be a blanket reprieve for anyone depositing demonetised notes up to Rs 2.5 lakh, and government is likely to introduce an amendment this week in Parliament that will allow those depositing unaccounted cash in demonetised Rs 500 and Rs 1,000 notes to pay 50% tax, lock in 25% amount for four years at zero interest, leaving only 25% for immediate use.
Changes to the income tax law were approved by Union Cabinet on Thursday.
Under the scheme, all large deposits beyond a threshold could be asked to explain the source and why the 50% tax and the mandatory 25% deposit scheme should not be applied, added the report.
The government had earlier said that individuals would be allowed to deposit demonetised notes up to Rs 2.5 lakh with income tax exemptions.The authorities said that smaller deposits from members of the same family will not go unnoticed.
"We would be getting reports of all cash deposited during the period of November 10 to December 30 above a threshold of Rs 2.5 lakh in every account," Revenue Secretary Hasmukh Adhia had said on November 10. "The department would do matching of this with income returns filed by the depositors". And suitable action will follow.