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BANK ACCOUNT MISUSE FOR BLACK MONEY WILL GIVES A SEVERE GOVERNMENT ACTION


Government today cautioned Jan Dhan account holders, housewives and artisans that they will be prosecuted under the I-T Act for allowing misuse of their bank accounts through deposit of black money in Rs 500/1,000 notes during the 50-day window till December 30.


The directive comes against the backdrop of reports that some are using other persons' bank accounts to convert their black money into new denomination notes. In some cases, even rewards are being given to account holders for allowing such misuse

The ministry said "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 the Income Tax Act".

The government had earlier said deposits up to Rs 2.50 lakh in bank accounts would not come under tax scrutiny as it is within the tax exemption limit. In the case of Jan Dhan account, the holder can deposit up to Rs 50,000.


However, the income tax department has noted that people are under impression that no action will be taken for deposits up to Rs 2.50 lakh during November 9-December 30

The tax department has already made quoting of PAN mandatory if cash deposits during the 50-day period aggregate Rs 2.5 lakh or more in bank accounts.


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