Arun Jaitley proposes amendments in I-T Act! 30% tax, 10% penalty to be slapped on undisclosed income

The Indian Government tabled amendments to the Income Tax Amendments Bill in order to keep a check on huge sums of unaccounted cash deposits, post demonetisation. The government has proposed 30% tax on undisclosed income, along with 10% penalty and 33% surcharge.

A further tax of 75% along with 10% penalty has also been proposed in case the Income Tax officials detect undisclosed wealth deposited.

The list also proposes that an amount of 25% of the total undisclosed income to be deposited in the Pradhan Mantri Garib Kalyan Deposit Scheme.

Tax officials will also look at all significant deposits of demonetised notes and check if there is unaccounted wealth or smaller deposits in a household in different family members' accounts.

"There is a Rs 2.5 lakh exemption but if you have split (the money) and four family members have each deposited this amount, then it will need to be seen," said a government official.

"We would be getting reports of all cash deposited during the period of November 10 to December 30 above a threshold of Rs 2.5 lakh in every account. The department would do matching of this with income returns filed by the depositors. And suitable action may follow," Revenue Secretary Hasmukh Adhia had said.