No provision for 200% penalty on income disclosed under I-T Act

The announcement of a 200-percent penalty on high-value deposits has run into trouble, CNBC-TV18 learns from government sources.

Sources tell CNBC-TV18 there is no provision in the Income Tax Act for slapping the 200-percent penalty if income has been declared and filed under an IT return. This essentially means there is no act to bar people from making high-value deposits during the demonetisation drive as long as tax is paid on it

One point that calls for clarification is on the tax rate. The tax rate for declaring income now will be 30 percent while the government’s recently concluded Income Declaration Scheme (IDS) had stipulated a tax rate of 45 percent on such declared income.

It must be noted that tax enquiries, if any, can be made by the IT department only once return is filed. Penal action would be invited if source of money is found to have a criminal trail. Watch video for more...