New Government Plans To Protect Honest Depositors From Tax Terror

The government is planning to introduce new rules that will aim to protect honest depositors from any harassment from tax officers. The new norm will set a limit below which tax scrutiny will not be normally taken up, a Times of India report, said.

Even as the tax department is analysing data related to demonetised currency notes that were deposited in bank accounts between 10 November and 30 December, large scale deposits of Rs 30,000 and above in case of Jan Dhan and dormant bank accounts have led to a more intense examination.

Initially, the government said cash deposits of Rs 2 to Rs 2.5 lakh made by housewives and small businessmen and traders would not be questioned. Tax authorities suspect that cash deposits amounting to as much as Rs 4 lakh crore may be unaccounted wealth that found its way into the banking system. Though the focus is on high value deposits, the government is fearful of being accused of harassing the common man.

Niti Aayog vice-chairman Arvind Panagariya said there should be clear-cut rules to reduce discretion by tax officers. "First, we could adopt a rule that barring exceptional circumstances, bank deposits made between 8 November and 30 December below a specified threshold will not be subject to scrutiny," he told The Times of India.