Action to be taken against those who misuse their bank account for converting Black Money!

The government had earlier said that deposits up to Rs 2.5 Lakh would not invite Income Tax inquiry and Jan Dhan account holders can deposit up to Rs 50,000 without any fear of coming scanner of Income Tax. But, the activities of using bank accounts of other people for converting black money into new currency in exchange for some premium has come to the notice of the Government as people are under impression that no questions will be asked for deposits up to Rs 2.5 Lakh.

Seeing the developments, the government has cautioned Jan Dhan account holders, housewives, and artisans that they will be prosecuted under the I-T Act for allowing misuse of their bank accounts through the deposit of black money in Rs 500/1,000 notes during the 50-day window till December 30.

The ministry said “such tax evasion activities can be made subject to income tax and penalty if it is established that the amount deposited in the account was not of the account holder but of somebody else. Also, the person who allows his or her account to be misused for this purpose can be prosecuted for abetment under the Income Tax Act”.