New Delhi: Finance Minister Arun Jaitley on Thursday said nobody would be harassed over smaller deposits, less than Rs 2.5 lakh, as people began thronging banks nationwide to exchange or deposit Rs 500 and Rs 1,000 currency notes that have been demonetised.
“Nobody will face questions or harassment for small deposits. It is only those with large amounts of undisclosed money who will have to face the consequences under existing laws,” Jaitley told reporters while inaugurating the two-day Economic Editors Conference here.
He said people might face problems initially, but in the medium- to long-run they will definitely benefit from the government’s policy of demonitising large currency notes in a bid to curb corruption, unaccounted wealth and terror financing. The denominations ceased to be legal tender from midnight on Tuesday.
The Finance Minister also said that the amounts of Rs 1.5-2 lakh are too small and the administration will not bother to make enquire into such deposits. Earlier, Revenue Secretary Hasmukh Adhia clarified that people just cannot walk away by depositing any amount of cash without prosecution. But amounts below Rs 2.5 lakh will attract no harassment.
What about an amount above Rs 10 lakh which does not match the income declared? What will be the penalty and what will be the tax?
“This would be treated as the 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,” Adhia said.
For people who are trying to buy jewellery to use their unaccounted cash, Adhia said, “The person who buys jewellery has to give his PAN number. We are issuing instructions to the field authorities to check with all the jewellers to ensure that this requirement is not compromised. Action will be taken against those jewellers who fail to take PAN numbers from such buyers.”
When the cash deposits of the jewellers would be scrutinised against the sales made, whether they have taken the PAN number of the buyer or not will also be checked, he said.