The government on Friday 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.
In a series of tweets, the Finance Ministry said, “Tax evasion activities by some people using other persons’ Bank A/Cs to convert their black money can be subjected to income tax & penalty. Also the person who allows his or her bank account to be misused for this purpose can be prosecuted for abetment under Income Tax Act.” The Finance Ministry’s tweets come in wake of reports that people may misuse JanDhan accounts to deposit their black money, paying a premium to the poor person who is allowing his/her bank account to be used.
It also requested the common public not to fall in the trap of black money hoarders.
Among other measures, the Income-Tax (IT) department has made it mandatory to link the permanent account number (PAN) to cash deposits of a certain value and lowered the threshold for reporting of such transactions by banks.
It has also introduced reporting requirements for cash deposits into current accounts.
Prime Minister Narendra Modi on November 8 said all existing Rs500 and Rs1,000 notes will cease to be legal tender from midnight in a crackdown on black money— untaxed and unaccounted-for income—and terror and drug financing using fake currency.
In his 40-minute address, first in Hindi and later in English, the Prime Minister said the notes of Rs 500 and Rs 1000 “will not be legal tender from midnight tonight” and these will be “just worthless piece of paper.” However, he said that all notes in lower denomination of Rs 100, Rs 50, Rs 20, Rs 10, Rs 5, Rs 2 and Re 1 and all coins will continue to be valid. He also announced that new notes of Rs 2000 and Rs 500 will be introduced.