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    IndiaPM calls Cabinet meet, penalty on high deposits likely

    PM calls Cabinet meet, penalty on high deposits likely


    PM calls Cabinet meet, penalty on high deposits likely

    New Delhi, November 24

    Prime Minister Narendra Modi has called Cabinet meeting on Thursday evening, possibly to discuss the penal 200 per cent tax that is keeping now invalid 500 and 1000 rupees notes from entering the formal banking system.

    The meeting, called at very short notice, comes amid reports that high tax penalty is holding back people from putting their cash savings into the formal banking system.

    Sources said the government wants all of the 500 and 1000 banknotes to be deposited and not burnt or destroyed for the fear of penal action.

    The Income Tax Department had previously warned that cash deposits above Rs 2.5 lakh threshold after demonetisation decision could attract tax plus a 200 per cent penalty in case of income mismatch.

    It was stated that the department was tracking all cash deposited during the period of November 10 to December 30, 2016, above a threshold of Rs 2.5 lakh in every account.

    This had put a fear in people with reports of the banned currency even being destroyed.

    Sources said the government may come out with a deposit scheme or an instrument like bond where the cash savings in the banned notes could be deposited.

    Modi's November 8 invalidation of high-denomination currency notes rendered 86 per cent of the currency in circulation useless in the biggest ever crackdown on black money, corruption and counterfeit currency. The move had led to Rs 14 lakh crore-worth currency being withdrawn from circulation.

    A 50-day window was given to holders of the old currency to deposit in their bank accounts. But the penal tax provisions were deterring many. — PTI

    The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.

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