With demonetisation in full swing, many citizens are concerned if the cash-in-hand they have will be treated as black money. If you’re worried about possible penalisation for the money you deposit, this video should help clear things up for you.
For the period from November 9th to December 30th, the government has defined a maximum limit of Rs. 2.5 lakh for cash deposits. As stated, deposits below this limit will come under scrutiny by the Income Tax department. If the cash deposits exceed this limit, the bank or post office will automatically have to report it to the Tax department. Similarly, for current accounts, the threshold limit for cash deposits between 9th November and 30th December is Rs. 2.5 lakh. If one has more cash than the said limit, they may deposit it in their bank, but they could be subject to scrutiny.
There are people who believe that the magical number – Rs. 2.5 lakh – will attract a lot of attention from the Tax department, whereas anything below that amount is safe and will not attract any attention. However, this is just a rumour, and completely false. Rs. 2.5 lakh is not an arbitrary number – rather, it is the maximum exemption limit for Income Tax for individuals. You will still have to justify any extra income that you possess, via your bank statements.
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If you are a salaried person or a housewife, then the savings that you have accumulated over the years would still have to be accounted for, using your bank statements. The Tax department will tally your withdrawals and deposits from the past to your expenses and the expenses of your spouse, and then decide if the savings that you show are feasible and believable.
In the below video, advocate Anuj Aggarwal, a taxation lawyer, explains when and how you can deposit more cash than the Rs. 2.5 lakh limit, and also how to respond to possible inquiries from the Income Tax department.
Find a qualified tax lawyer in your city on LawRato.