The government on Wednesday said people trying to adjust their declared black money by showing a sudden jump in their income for the current financial year cannot escape the law by paying tax at applicable rates.
This was made clear by Finance Minister Arun Jaitley in the Rajya Sabha during a debate on demonetisation after Akali Dal leader Naresh Gujral, citing newspaper reports, said chartered accountants are suggesting that only 30% tax is payable under the current Income Tax Act.
"I think what Gujral is referring to that if somebody declares it (the deposit) as part of current income, then current income is taxable at rates provided in the I-T Act. But if the current income becomes suddenly 5000% of last year's income, then will it be treated as current income or otherwise," Jaitley said and added that existing laws will apply.
Last week, Revenue Secretary Hashmukh Adhia had said the I-T Department will be getting reports of all cash deposited during the period of November 10 to December 30, 2016, above a threshold of Rs 2.5 lakh in every account.
"The (tax) department would do matching of this with income returns filed by the depositors. And suitable action may follow," he added.
Any mismatch with income declared by the account holder will be treated as a case of tax evasion.
"This would be treated as a case of tax evasion and the tax amount plus a penalty of 200 per cent of the tax payable would be levied as per the Section 270(A) of the Income Tax Act," the Secretary had said.