Unaccounted deposits will attract 60% tax plus penalty

Clearing the air on tax penalty on deposit of unaccounted cash, the Union Cabinet said taxes on unaccounted deposits may be levied at the rate of up to 60% (30% tax plus 30% penalty).

This is more than the 45% levied under the income disclosure scheme (IDS) that closed on September 30.

Earlier, the government had stated it would slap a penalty of up to 200% on unaccounted deposits.

Under Section 270A, penalty is leviable only when assessed income is more than the income declared in the tax return.

In this regard, if the amount of cash deposited in a bank is declared by the assessee in his return and applicable taxes are paid, there can be no penalty under section 270A.

The government has allowed cash deposits till s 2.5 lakh and would scrutinise if the deposits are made more than the specified amount.