ALSO READDisclosures under black money window 'firewalled' against Black money window:CBDT issues notification to ensure secrecy Black money window: CBDT issues fresh FAQs; PAN mandatory IDS: Black money declaration without PAN to be accepted Black money window: IT dept to publish list of asset valuers
With the last date for paying the first installment of due taxes and penalty under the one-time black money window IDS nearing, banks have been asked to accept the old Rs 500 notes from the declarants under the scheme and not seek the source of funds from them.
They have also been asked to ensure that such payments were accepted from the declarants without any hassle.
The Indian Banks' Association (IBA) has written a letter to all its members in which it referred to a recent CBDT communication to RBI which cited a complaint from a declarant that he/she could not deposit the payment as a bank branch in Bengaluru allegedly refused to accept the tax and penalty as per plan of the Income Declaration Scheme (IDS) that ended on September 30.
CBDT, which is the I-T department's policy-making body, noted that the scheme stipulates that a minimum amount of 25 per cent of the tax, surcharge and penalty is to be paid by November 30, 2016.
"Accordingly, all the member banks are requested to make note of the ... Time schedule and as directed accept payments under IDS, 2016 up to September 30, 2017 and also for such cases the banks should not seek source of funds," it said adding, "we request you to sensitize your branches accordingly."
The IBA added that RBI guidelines "clearly sets out that banks can accept old Rs 500 denomination notes for payment of taxes and penalties. Thus, there should not be any doubt that these notes can be accepted for payment of tax, surcharge and penalties under the IDS, 2016, upto December 15, 2016.
"Banks must adhere to the above instructions strictly and banks should ensure that the branches are aware of the FAQs (issued in this regard earlier by the RBI)."
It added that the recent communication from the Central Board of Direct Taxes to the RBI, subsequently sent to the IBA for action, had said that it "has been alleged that the bank authorities are refusing to accept payment stating that since IDS, 2016 has closed on September 30, the banks cannot accept the challan beyond the date".
The CBDT has also appended the scheme of the IDS which stipulates that a minimum amount of 25 per cent of the tax, surcharge and penalty is to be paid by November 30, 2016; a further amount of 25 per cent of the tax, surcharge and penalty to be paid by March, 31 next year; and the balance amount to be paid on or before September 30, 2017.
The I-T department only yesterday issued advertisements in this regard in leading national dailies stating that non-payment of the first installment of tax and penalty by November 30 on the part of declarants will render their declaration under IDS as "invalid".
As per official data, 64,275 declarants had disclosed an amount of Rs 65,250 crore under IDS which would yield about Rs 30,000 crore in taxes to the government.
The four-month IDS was a one-time window, beginning June, given to black money holders to declare their stash and come clean by paying 45 per cent tax and penalty.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)