Demonetisation: Taxmen can not impose 200 per cent penalty
November 25, 2016 23:01
In order to make demonitisation drive more effective government will have to make amendments in Income Tax Act to give more teeth to IT officers. Experts believe until that is done demonitisation drive will not be able to fully achieve its goals.
At the time of launching, government had claimed it will charge both tax and 200 per cent penalty in case the person fails to explain the source of the income. However tax experts say presently in Income Tax Act there is no provision to penalise a person under Section 270A if the assessee deposits a certain amount in his bank account and claims it to be his or her income of the present year.
The person in that case will only be liable to pay a maximum tax of 50 per cent, as the IT Act has no provision to penalise the person 200 times. The person who deposits the amount and declares it as his income is only liable to pay the income tax and not the penalty.
Similarly in Jan Dhan accounts, if an account holder manages to explain how he acquired the amount then Income Tax official cannot slap any penalty.
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