An income tax notice issued to a Gangtok firm is doing the rounds of social media.
“The income tax department is examining the source of cash deposits of Rs 500 and 1000 with State Bank of Sikkim. We have information that you/your concern/ firm/ company has deposited the following sum between 12/11/16 and 14/11/16,” the notice issued by Director of Income Tax (Investigation) states.
The notice asks the firm to be present in person and explain the source of the mentioned deposits along with supporting documentary evidence such as past income tax returns, books of account, vouchers or documents.
While the amount of deposit made by the firm mentioned in the notice exceeds Rs 2.5 lakh, another clarification has been issued by the Income Tax Department late on Friday warning misuse of the Rs 2.5 lakh exemption limit.
Since, November 9, 2016, through various advertisements the Government had clarified that post demonetisation small deposits within the current Income Tax exemption limit of Rs 2.5 lakh made by artisans, workers, housewives, and the likes would not be questioned by the Income Tax Department.
However, don’t be under the assumption that any deposit made under Rs 2.5 lakh, irrespective of your income, would escape the purview of the Income Tax Department.
After the exemption limits were announced, there have been reports of people using bank accounts of employees, relatives and others to convert black money into new denomination notes. There are instances of reward being given to the account holders for allowing their accounts to be used. “This activity has been reported in case of Jan-Dhan Accounts also,” says the Income Tax Department.
A clarification has been issued by the Income Tax Department that such tax evasion activities can attract Income Tax as well as penalty if it is established that the amount deposited in the account was not of the account holder but of somebody else.
Action can be taken against someone who assists black money hoarders. “Person who allows his or her account to be misused for this purpose can be prosecuted for abetment under Income Tax Act,” the Income Tax department has warned.
Labelling black money as a “crime against humanity” people have been urged not to be a partner in crime and get enticed by black money converters. Instead they have been asked to inform the department of such illegal activities and help eradicate black money.