Demonetization: Misuse of bank account for
black money deposit to invite govt action
Government Friday cautioned
Jan Dhan account holders, housewives and artisans that they will be prosecuted
under the I-T Act for allowing misuse of their bank accounts through deposit of
black money in Rs 500/1,000 notes during the 50-day window till December
30. The directive comes against the backdrop of reports that some are
using other persons’ bank accounts to convert their black money into new
denomination notes. In some cases, even rewards are being given to account
holders for allowing such misuse.
The government had earlier said deposits up to Rs 2.50 lakh in
bank accounts would not come under tax scrutiny as it is within the tax
exemption limit. In the case of Jan Dhan account, the holder can deposit up to
Rs 50,000. However, the income tax department has noted that people are under
impression that no action will be taken for deposits up to Rs 2.50 lakh during
November 9-December 30.
The ministry said “such tax evasion activities can be made
subject to income tax and penalty if it is established that the amount
deposited in the account was not of the account holder but of somebody else.
Also, the person who allows his or her account to be misused for this purpose
can be prosecuted for abetment under the Income Tax Act”.
The government has earlier said black money deposited in bank
accounts during the 50-day period will be subject to tax, interest and 200 per
cent penalty. It asked people not to be lured into conversion of black money
and become a partner in the crime of converting black money into white through
this method.
“Unless all citizens of the country help the government in
curbing black money, this mission of black money will not succeed,” the
official statement said. It also asked people to provide information of such
illegal activities to the I-T department so that immediate action can be taken
and such illegal transfer of cash can be stopped and seized.
“Black money is a crime against humanity. We urge every conscientious
citizen to help join the government in eradicating it,” it added. Following the
demonetization announcement of November 8, people have been queuing up in front
of banks to convert and deposit the now-defunct 500 and 1,000 rupee notes.
The tax department has already made quoting of PAN mandatory if
cash deposits during the 50-day period aggregate Rs 2.5 lakh or more in bank
accounts.
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