Beware! You Should Not Fall Prey To Wrong Advice On Black Money !
Do not to sell the notes at discounted prices or deposit the cash into bank accounts of other benami persons in fear of penalty. You will be caught, sooner or later.
Do not fall prey to any advice where you give your jeweller the amount you want to convert into white as cash so that he would give you a cheque back for the same amount less 4%. He would give you a purchase bill to show that you have sold silver utensils to him. On the amount of the cheque when you file your return you will have to pay no capital gain tax as Silver utensils are Personal effects and capital gain does not arise on sale of personal effects. There you go, you thought that the money is white now. Trust me, it’s an old trick and tax-man knows how to deal with it.
Do not ask your relative to gift you any amount by way of cheque so that you will in turn transfer your black money to him/her. 56(2)(vii) is not attracted as gift is received from a relative. But you will not be spared and your relative will not forgive you. Lot many cases in the past have been unearthed and IT sleuths know how to get to the bottom of this.
Do not claim any bogus expenses or bogus loss to gain more trouble. You will be in trouble, trust me. It will involve too many manipulations. Disclosure by paying tax at maximum of 30% will be advantageous compared to IDS where rate of tax was 45%. So don’t fall prey to misinformation.(Read the last paragraph to understand more).
Do not show loan receipts from relatives by paying them cash and receiving cheques in lieu of it to temporarily convert your black money to white. People who do this are not aware that you will have to prove the creditworthiness as well as the genuineness of transactions to the IT Department or else the loan receipt will be treated as income from undisclosed sources.
Do not manipulate accounts by creating bogus cash on hand. If your CA has advised you this, it’s time to change the source of such wrong & unprofessional advice. Be good citizen and pay tax honestly to buy peace by building capital. Do not shy away from it. It is your responsibility. Do not consider the government to be a bunch of fools to not understand how crooks think. They are a step ahead of you, this time. Even if they miss out on something now, they have enough time to come looking out for you. Do not complicate. Keep it simple. Honesty was and will forever be the right policy. Do not trust media lies. Please read this and decide for yourself – If unaccounted cash or black money are deposited into bank and appropriate tax (maximum 30% plus surcharge) is paid on this additional income, no penalty for under reporting or misreporting can be imposed by assessing officer u/s 270A of Income tax Act, which has been newly introduced from current year. Even, tax payer is not required to substantiate source of income and income can be declared without disclosing head of income. This is because penalty for concealment can be levied only on difference between assessed income and returned income. This view is based on bare reading of section 270A itself. So penalty of 200% under no circumstances can be levied on such income disclosed in return of current year. With due respect, I have to say that The news paper headlines that ‘200% penalty on unaccounted cash deposits of over ₹ 10 lakh’ published in Times of India and other media are misleading.
Well, last but not the least – Do not go to buy costly railway or airline tickets. Do not approach Toll plaza operators too – You know why. By now the government has ensured that such attempts will not derive any desired results for you. Let’s help our government in it’s noble mission of ‘BHARAT NIRMAN’ !!
Jai Hind !
– Vedant Kumar. Vedant Kumar is a part-time writer, part-time journalist and full-time traveller. He has interests in spirituality, history, culture and politics. He tweets from @VedKr