Hyderabad: Following fewer than expected deposits of the banned Rs 500 and Rs 1,000 notes, the government had taken a step back regarding cracking the whip on those who deposit large amounts.
Sources said that the government has directed the income-tax department to create awareness that no raids would be conducted if the depositors make advance tax payment towards the deposits.
An official from the I-T department said that the demonetisation drive was for curbing counterfeit currency and unexplained amounts, but not for genuine cases. “If any bank customer deposits huge amounts followed by advance tax payment, they may not face any penalty from the department,” he said.
The official advised the public not to panic. “It is true that the I-T Act has provisions to impose 100 per cent to 300 per cent penalty in cases of unexplained amounts. But in most of the cases wherein the respondents have failed to explain about the source of income, only 100 per cent penalty was imposed. Only in 50 cases in the last 50 years has the I-T department imposed 300 per cent penalty,” the official said.
Charted accountant P. Jitender Reddy said until the bank customers did not pay the tax, there wo-uld no concealment process. “Bank customers can deposit any amount, but they should pay tax at the end of the financial year or advance tax at any time,” he said.
Mr Reddy said that under Sections 68, 69 and 69 (c) read with 115 and 115 (B) of the Income-Tax Act, the advance taxpayer would be safe.
