TAX SAVING FOR FREELANCERS, PROFESSIONALS, TRADER & WEB BASED AGENCIES

Effects on Cash deposits after Demonetization

Effects on Cash deposits after Demonetization

Planning to make any large deposits of the scrapped notes before the looming December 30 deadline? You may run into trouble, as the government has capped the number of times you can deposit money above Rs 5000 to just one.


In the notification, drafted on December 17, it was mentioned that  depositor, with an amount higher than Rs 5,000 in old notes, will be questioned on record by two bank officials.


People wishing to make a deposit less than Rs 5000 can do more than once, just as they have done before, the government said. But if the sum of those deposits exceed Rs 5000, the depositors “may be subject to the procedure” as described above for those who deposit more than Rs 5000.


The depositor will be questioned, “As to why this could not be deposited earlier”. The explanation should be kept on record to facilitate an audit trail at a later stage, the order stated.


The rules do not apply to those who deposit the scrapped notes under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016.


Furthermore, the accounts which are not KYC compliant may have a cap of Rs 50,000 for the one-time deposit above Rs 5000.


Tenders of SBNs in excess of Rs5000 into a bank account will be received for credit only once during the remaining period till December 30, 2016. The credit in such cases shall be afforded only after questioning tenderer, on record, in the presence of at least two officials of the bank, as to why this could not be deposited earlier and receiving a satisfactory explanation. The explanation should be kept on record to facilitate an audit trail at a later stage. An appropriate flag also should be raised in CBS to that effect so that no more tenders are allowed.


Tenders of SBNs up to 5000 in value received across the counter will allowed to be credited to bank accounts in the normal course until December 30, 2016. Even when tenders smaller than 5000 are made in an account and such tenders taken together on cumulative basis exceed 5000 they may be subject to the procedure to be followed in case of tenders above Rs 5000, with no more tenders being allowed thereafter until December 30, 2016.


It may also be ensured that full value of tenders of SBNs in excess of RS 5000 shall be credited to only KYC compliant accounts and if the accounts are not KYC compliant credits may be restricted up to 50,000 subject to the conditions governing the conduct of such accounts.


The above restrictions shall not apply to tenders of SBNs for the purpose of deposits under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016.


The equivalent value of specified bank notes tendered may be credited to an account maintained by the tenderer at any bank in accordance with standard banking procedure and on production of valid proof of Identity.

Tax saving for Freelancers, Professionals, Trader and Web based agencies

10 mins of consultation. Place a request.

Some of the featured articles from our knowledge center

Business2 13a51fd54d37dfeead10bd04c34a46671e69097acf6d8002d2665eb06b5cf58f
What is the income tax payable on partnership firm

As per section 4 of partnership act 1932, partnership means the relationship between the person who are agreed to share the profits of business car...

Business3 1835184f1312bba0b871fddd223a24dd62299180ed03a78d9e4098813c851963
What is business income on presumptive basis under section 44ad and 44ada

As per section 44AA income Tax act 1962, every person who is carrying on business or profession is required to maintain books of accounts. However,...

Business1 8b8cee9b60a38e9df92fb5b897e7c09195532b3d70b7ec28803a600cf2ce60cd
What is GST and different types of GST forms

The Prime Minister approved “The constitution amendment bill for Goods and Service Tax”(GST) in the Parliament Session (Rajya Sabha on 3 August 201...