Parking unaccounted money into bank accounts won’t make them ‘white’, finance minister Arun Jaitley said when asked about surge in deposits following demonetisation.
“By just depositing it (unaccounted money), you don’t avoid the responsibility of paying tax,” Jaitley said.
The Income Tax department is keeping a keen eye on deposits, he added.
As per RBI, about Rs 8.45 lakh crore in scrapped Rs 500 and 1,000 notes were deposited with banks by November 27. Following the government’s decision to demonetise high-value banknotes from November 8 mid-night, people have been depositing these notes in the banks.
The Lok Sabha has passed an amendment on the Income Tax Act to slap higher tax, penalties and surcharge on undisclosed income. The Bill is pending in the Rajya Sabha.
As per the amendment, the government will levy a tax of 50% on unaccounted income if it is disclosed voluntarily before December 30. After that, a steep tax and penalty of up to 85% will be levied, if discovered by authorities
Replying to a question of long queues at banks, the finance minister said RBI has increased the supply of new Rs 500 notes and asserted that the situation will improve soon.
Jaitley also discussed the issues concerning demonetisation with the state finance ministers after the GST Council meeting.