The Central government has assured small traders, households and self-employed that they need not be afraid of depositing old currency notes of Rs 500 and Rs 1,000 as the tax incidence will kick in only after a threshold.
The assurances came in a series of tweets by economic affairs secretary Shaktikanta Das.
Banks and post offices have started accepting old notes of Rs 500 and Rs 1,000 denominations and issuing the new series of Rs 500 notes in addition to the new denomination of Rs 2,000 from Thursday at ATMs and branches.
The statement by Finance Minister Arun Jaitley that cash deposits above Rs 2.5 lakh would be taxable and a 200 percent penalty could be levied if there is an income mismatch triggered concerns in some quarters.
He assured small businessmen, housewives, artisans and workers with savings that any cash deposit under the bracket of Rs. 2.5 lakh wouldn't be taxable or scrutinised.
The government said that those who buy gold with cash will have to give their pan card number to the jewellers. Action will be taken against those who do not comply.
"We are issuing instructions to the field authorities to check with all the jewellers to ensure this requirement is not compromised."
Shaktikanta Das tweeted on Thursday to clarify people on concerns over cash deposits:
Small traders,cash savings in households,self employed small businesses can deposit 500/1000 notes upto 1 or 2 lakhs without fear.
— Shaktikanta Das (@DasShaktikanta) November 10, 2016
Focus is on bigger cash deposits which will be looked into.
— Shaktikanta Das (@DasShaktikanta) November 10, 2016
Receipt of old 500/1000 notes by utilities for payment of electricity charges upto 11 Nov midnight includes all utilities.
— Shaktikanta Das (@DasShaktikanta) November 10, 2016
Stories about digital lockers, additional compliance requirements for NRIs,etc totally false.
— Shaktikanta Das (@DasShaktikanta) November 10, 2016
Lot of misinformation being spread in social media. Please do not believe them.
— Shaktikanta Das (@DasShaktikanta) November 10, 2016