Giving some more relief to common man, the Government of India (GoI) Thursday said old Rs 500 and Rs 1,000 notes can be used to pay utility bills, taxes, penalty and fees to central and state governments till midnight of November 11.
While demonetising the high-value currency notes on Tuesday, the GoI had permitted people to use such notes for payment of certain services like rail and metro ticket, rail catering, airline ticket, buying LPG cylinder and medicines with doctor’s prescription.
Economic Affairs Secretary Shaktikanta Das today tweeted, “Old 500, Rs 1000 notes to be accepted for payment of fees, charges, taxes, penalty to central and state governments, including municipalities and local bodies.”
Such old notes to be accepted for payment of utility charges like water and electricity, he said.
“Above facilities to be available till November 11 midnight. Records to be maintained,” Das tweeted.
Exemptions have also been made for payments at government hospitals, milk booths, crematoria/burial grounds and petrol pumps till November 11.
People having invalid notes are required to either deposit them in their accounts or exchange them with new currency notes. Banks have already started issuing new currency notes of Rs 500 and Rs 2,000 denominations.
Meanwhile, Press Information Bureau has circulated the following information in Q and A format. The replies to the questions have been given by Union Revenue Secretary Dr Hasmukh Adhia
Q: A lot of small businessmen, housewives, artisans, workers may have some cash lying as their savings at home, will the income tax department ask questions if the same is deposited in banks?
A: Such group of people as mentioned in the question need not worry about such small amount of deposits up to Rs 1.5 or 2 lacs, since it would be below the taxable income. There will be no harassment by Income Tax Department for such small deposits made.
Q: Will the Income Tax Department be getting reports of cash deposits made during this period? If so, will the current threshold of reporting requirement of reporting cash deposits of more than Rs 10 lacs will only continue?
A: We would be getting reports of all cash deposited during the period of 10th November to 30th December, 2016 above a threshold of Rs 2.5 lacs in every account. The department would do matching of this with income returns filled by the depositors. And suitable action may follow.
Q: Suppose the department finds that huge amount of cash above Rs 10 lacs is deposited in a bank account, which is not matching with the income declared, what would be the tax and penalty to be paid on the same?
A: This would be treated as the case of tax evasion and the tax amount plus a penalty of 200% of the tax payable would be levied as per the section 270(A) of the income tax Act
Q: It is believed that a lot of people are buying jewelry now, how does department plan to tackle this?
A: 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 scrutinized against the sales made, whether they have taken the PAN number of the buyer or not will also be checked.
