Party accounts can be scrutinised by tax department: Finance Ministry

Party accounts can be scrutinised by tax department: Finance Ministry

Party accounts can be scrutinised by tax department: Finance Ministry

Section 13A of the Income Tax Act, 1961 exempts political parties from income tax on house property, other sources, capital gains and income by way of voluntary contributions received from any person. In contrast, Indian citizens have been warned of depositing old banknotes worth more than Rs 2.5 lakh (nearly $3,700).

Speaking on the occasion, CBDT Chairman Sushil Chandra said, the department has issued around 3000 notices on the basis of deposits in bank accounts and have seized 316 crore rupees in cash. "I-T department will probe money deposited in bank accounts and clearance will be given only after deducting taxes from any such account".

For those unable to do that, furnishing PAN will be required, Adhia said.

Revenue Secretary Hasmukh Adhia said at a press conference that the government is collecting data on every single deposit in bank accounts through the Financial Intelligence Unit (FIU).

Clarifying on reports that the government can not scrutinise tax returns of political parties, CBDT on Saturday said that there are enough provisions in the Income Tax Act to scrutinise those accounts.

She clarified that the exemption from Income Tax is only for registered political parties subject to certain conditions which include keeping and maintaining books of accounts and other documents to enable the tax authorities to deduce its income therefrom.

Not declaring the black money under the scheme now but showing it as income in the tax return form would lead to a total levy of 77.25 per cent in taxes and penalty.

People, who want to rid of the black money stain, will get one last chance. "But where we find people have tried to misuse the provision by putting in multiple accounts in different banks (we will go after them)", he said.

After President Pranab Mukherjee gave his assent to the Taxation Laws (Second Amendment) Bill 2016, the Act, which has provisions of levy of a total tax, penalty and surcharge of 50 percent on the amount deposited post demonetisation, will come into force tomorrow.

Prime Minister Narendra Modi scrapped 500-rupee and 1,000-rupee banknotes on November 8 in a bid to flush out cash earned through illegal activities, or earned legally but never disclosed to the taxman.

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