Unaccounted deposits after November 8 to attract heavy taxes

The Cabinet on Thursday is believed to have discussed amending laws to levy close to 60% income tax on unaccounted deposits in banks above a threshold post demonetisation of high-denomination currency notes.

The Cabinet on Thursday is believed to have discussed amending laws to levy close to 60% income tax on unaccounted deposits in banks above a threshold post demonetisation of high-denomination currency notes.

The move comes amid banks reporting over Rs 21,000 crore being deposited in zero-balance Jan Dhan accounts in two weeks after the 500 and 1,000 rupee notes were banned(AFP Photo)

The move comes amid banks reporting over Rs 21,000 crore being deposited in zero-balance Jan Dhan accounts in two weeks after the 500 and 1,000 rupee notes were banned, which authorities apprehend may be the laundered black money.

There was no official briefing on what transpired in the meeting that was called at short notice as Parliament is in session. Traditionally, there could no disclosures outside on any policy decision taken during the sitting of Parliament.

Sources said the government was keen to tax all unaccounted money deposited in bank accounts after it allowed the banned currency to be deposited in bank accounts during a 50-day window from November 10 to December 30.

There have been various statements on behalf of the government ever since the demonetisation scheme was announced on November 8, which has led to fears of the taxman coming down heavily on suspicious deposits that could be made to launder blackmoney.

Officials have even talked of a 30% tax plus a 200% penalty on top of a possible prosecution in cases where black money holders took advantage of the 50-day window for depositing the banned currency.

Sources said the government plans to bring an amendment to the Income Tax Act during the current winter session of Parliament to levy a tax that will be higher than 45 per cent tax and penalty charged on blackmoney disclosed in the one- time Income Disclosure Scheme that ended on September 30.

As for those black money holders who did not utilise the window, they would be charged a higher rate which could be close to 60 per cent that the foreign blackmoney holder had paid last year.

Sources said the government is keen to root out benami deposits, particularly in Jan Dhan accounts.

There was also talk of the government imposing a limit on domestic gold holding, but it is not clear if the proposal was discussed at the Cabinet meeting chaired by Prime Minister Narendra Modi on Thursday night.