Cabinet clears amendments to Income Tax Act to tax deposits post Nov. 8

Cabinet has cleared amendments in Income Tax Act, which would allow the government to tax deposits made in banks after Nov 8. Since the amount of deposits soared up after Rs 500 and Rs 1000 lost their legal tender on November 8 midnight, taxing the deposited amount would increase the revenue collected by exchequer exponentially. The decision was taken at the cabinet meeting called by Prime Minister Narendra Modi on Thursday evening.

Recently the Cabinet has approved the amendment to the IT Act. As per the new law, the tax rate of 60 per cent may be levied on the previously undisclosed deposits. Also the amendment on the tax will be applicable to savings post November 8.

As per a report by CNBC- TV18, the recent announcement of a 200 per cent penalty on high-value deposits ran into trouble. There is no such provision in the Income Tax Act for imposing a 200 per cent penalty if the income has been declared and filed under the IT return norms. This further clarifies that there is no such provision under the act that bars people to make high-value deposits during the demonetisation period as long as the tax is paid for the same.#casansaar (CNBC - Financial Express)