Now, bank deposits since Nov 8 may attract 60% income tax

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The Union Cabinet late on Thursday cleared a proposal to amend the Income Tax (I-T) Act to levy close to 60% deduction on unaccounted deposits in banks above a threshold, said sources.

The decision was purportedly prompted by a surge in deposits — about ~20,000 crore, according to some reports — in Jan Dhan accounts since November 8, when the central government announced the demonetisation of Rs 500 and Rs 1,000 currency notes. The amount deposited in this period is almost 50% of the total deposits in these accounts in the two years since their launch. The move is also aimed at preventing black money holders from circumventing existing I-T Act provisions.

Related Story:  How the poorest escaped demonetisation: They don’t have money

Also, earlier in the day, the government, facing severe attacks over difficulties in implementing demonetisation, extended till December 15 the facility of using old Rs 500 notes in public utilities and included more services such as mobile recharge but stopped the over-the-counter exchange of defunct currencies and use of Rs 1,000 notes.

Current and arrears dues payments will be limited to only water and electricity, a facility that will continue to be available only for individuals and households. However, the release said payments for the transactions under all the exempted categories will now be accepted only through old Rs 500 notes.

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