Unaccounted cash in bank accounts to attract 50 per cent tax, 4 year lock-in period

New Delhi : In a new development, the government has decided to impose 50 per cent tax on unaccounted cash deposited in bank accounts with old currency; a lock-in period of 4 years will also be imposed on the remaining 50 per cent amount.

However, a higher 90 per cent tax and penalty will be levied if assesses fail to declare their unaccounted cash in the bank accounts.

Cash deposits made using the scrapped 500 and 1,000 rupee notes above a threshold that are declared to Income Tax authorities may attract 50 per cent tax, as per the amendment to the Income Tax Act approved by the Cabinet last night.

Half of remaining deposits, or 25 per cent of the original deposit, will not be allowed to be withdrawn for four years, top sources said.

The government has given  a 50-day window to people to deposit their old currency notes of Rs 500 and Rs 1000 in their respective bank accounts.