Is my money: black money? #savehardearnedmoney
(Last Updated On: August 28, 2019)
Keeping the promise of abolishing corruption made while 2014 elections alive and inspired by the like of “kadak chai”, PM Modi took the biggest and boldest decision of discontinuing Rs. 500 & Rs. 1000 notes on 8th November, 2016 in the fight against black money, corruption, terrorism and counterfeit notes. And, since then the country has already witnessed all the possible human emotions, debates and discussions which don’t seem to stop.
One major topic of discussion among the public being “Black Money”, “White money”, “Unaccounted Income” and “Illegal Money”. Only a few people get that unaccounted money and illegal money are two different terms having different meanings and illegal money is same as black money.
While all the black money / illegal money can be termed as unaccounted income, all the unaccounted income does not come under the ambit of black money / illegal money. Generally, black money means the money earned with the deeds of crime while unaccounted income is nothing but the income which has not been declared to Income Tax Department.
Although, the Income Tax Law treats unaccounted income as black money too and hence, if you have any unexplained income with you, that will be treated as black money.
But, in case, you have saved hard earned money and you have a valid source of income, explanation and evidence, then you need not worry about any notices, scrutiny or penal provisions. A possible view can be taken that any such unaccounted cash may be deposited into bank and appropriate tax (30.9% plus surcharge) to be paid on this additional income and file the return disclosing this income. In such a case, such deposits with whole amount of tax already paid shall not attract any penalty u/s 270A for under reporting or misreporting of income; the reason being penalty for tax evasion can only be levied on difference between assessed income and returned income and thus, you don’t need to worry. However, this is as per the existing law but there may be some new provisions in the upcoming budget. Therefore, it is advisable to take an expert opinion before taking any action.
In case your hard earned savings does not exceed Rs. 2.5 lakhs, then you need to relax, as PM Modi has assured that there will be no investigation on people who are depositing that much saved amount.
Further, a lot of debates and thoughts have also been furnished as to how sudden did something like this happen? Clearing all the doubts and buzz, PM Modi took a jab with his speeches in Goa and Ghazipur letting the nation know that this is something not so sudden but a planned process which is being carried out from last few months. The measures such as opening of Jan Dhan accounts, compulsory presentation of PAN card while purchasing jewellery worth Rs. 2 lakhs or more, amending agreements with various foreign countries and introduction of Income Declaration Scheme, 2016 marked the commencement of a changing India.
Moving forward, Modi hinted of introducing new schemes and instructions to ensure elimination of corruption and terrorism mainly. He further hinted people to beware of the “Benami Property” and transactions in foreign accounts as the government is watching that. Also, he added that he may employ over a lakh people for carrying out this mission successfully. Such hints further added fuel to the fire for those with large sum of money in cash as they are frightened with possible Income Tax inquiry, notices, penalty and prosecutions.
In this matter, CA Abhishek Soni, Founder of Tax2win.in says “amidst all the cries, your best saviour is your honestly filed Income Tax Returns and appropriate Tax payments”. Honestly, the way things are going, it would be no wonder if the income tax act gets hugely modified or even nullified, the stock of gold is to be maintained on a restricted basis, or the bank accounts are monitored on each transaction.
For any doubts/queries, visit our helpline now : https://tax2win.in/unaccounted-money-helpline