If there is money in your account, the source of which you are not able to inform the Income Tax Department, then you will have to pay huge tax on it (how much tax you have to pay on Unexplained cash). Up to 83.25 percent tax may have to be paid on such money. Let us know about it in detail.
Many people in India find various ways to evade tax, the result of which is that they accumulate black money. For the last several years the government has been trying to stop tax evasion. Even the Income Tax Department has a provision to track the money for which you cannot explain (how much tax you have to pay on Unexplained cash) i.e. Unexplained cash.
Income tax is levied on 5 categories of income – salary, house property, income from business, capital gains and income from other sources. Action is also taken against tax evaders under the Income Tax Act.
Heavy tax on not being able to disclose source of income
According to income tax rules, any kind of money coming into the taxpayer’s account is sure to be taxed, if exemption is not given on it. If the taxpayer has not paid tax on any such money, then he will have to explain the source of receipt of the money and also why he has not paid tax on that money. It is important to know the source of income, otherwise such money can put a heavy tax burden on you.
Keep this in mind when it comes to gold, jewelery or other valuables.
Under Section 69A of the Income Tax Act, if any money, gold, jewelery or any other valuable thing is found in the possession of a person, which is not mentioned in the account nor has the taxpayer given any information about its source or has not been given by the taxpayer. If the Assessing Officer is not satisfied with the information given, then this will be considered as the income of that person for that year.
So a huge tax of 83.25 percent will be charged.
According to income tax rules, up to 83.25 percent tax has to be paid on the money on which information is not given to the Income Tax Department. This includes 60 percent tax, 25 percent surcharge and 6 percent penalty. That is, while taking tax on such money, it is not seen which tax slab it falls in, rather 60 percent tax is directly imposed on it.
In this case 6 percent penalty will not be imposed
No deduction is given on the money which is not reported, nor is any kind of loss allowed to be set off. However, 6 per cent penalty is not imposed if it is included in the tax return and tax is paid on it. Apart from money, if information is not given about gold or any other valuable thing or any kind of cash, then a heavy tax of 83.25 percent will be imposed on it.
