News Karnataka
Monday, January 30 2023

FinMin warns people against parking black money in others’ accounts

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New Delhi: Seeking to close all the gaps for people to turn their black money into white, the Finance Ministry on Friday warned those who are using others’ accounts to hoard their cash, and that the person allowing his or her account to be misused is also liable for prosecution.
Diamond merchant from Surat surrenders Rs 6,000 cr in cash?-1“Tax evasion activities by some people using other persons’ bank accounts to convert their black money can be subjected to income tax and penalty,” Finance Ministry said in a tweet. “It is hereby clarified that such tax evasion activities can be made subject to income tax and penalty if it is established that the amount deposited in the account was not of the account holder but of somebody else. Also the person who allows his or her account to be misused for this purpose can be prosecuted for abetment under Income Tax Act,” the ministry said in a press note.

The government had earlier announced that small deposits made in the banks by artisans, workers and housewives would not be questioned by the Income Tax department in view of the fact that the present exemption limit for income tax is Rs 2.5 lakh.  The press note said that the government has received reports that some people are using other persons’ bank accounts to convert their black money into new denomination notes for which reward is also being given to the account holders who agree to allow their account to be used.

“This activity is reported in case Jan Dhan Accounts also. However, the genuine persons having their own household savings in cash and depositing the same in the bank would not be questioned,” it added. The note also urged the people to give information of such illegal activities to the Income Tax department so that such illegal transfer of cash can be stopped and seized.

The ministry rebutted the rumours that the government’s demonetisation move was only a cosmetic exercise and that people would be able to find out other ways to keep their black money.

Earlier in the day, scoffing at rumours, the Finance Ministry said there is no move to seal bank lockers and neither it is true that the ink of the new Rs 2,000 notes has been bleeding in some cases. “Myth: Next move is to seal bank lockers and confiscate gold, diamonds and jewellery. Reality: This is baseless. There is no proposal to seal bank lockers and confiscate the jewellery,” the ministry tweeted.

The ministry also said the Rs 2,000 notes have a “intaglio” (a design that is incised or engraved into a material) safety feature. “To identify a genuine note when you rub it against a cloth, a turbo-electric effect is generated, which and it is due to this that the note’s ink gets transferred on to the cloth,” the ministry said.

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