How Tax Will Be Calculated Over Black Money

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Whole nation was amazed when Prime Minister Narendra Modi announced demonetization of 500 and 1000 notes in India on 8 November 2016. In reaction to it, people started to buy things from market like electronics, tickets and much more to minimize loss of money to them.

Revenue Secretary of announced on twitter :
Hasmukh Adia, Revenue Secretary of India said that from 10 November to 30th December, amount of upto Rs.2.5 Lakhs will be allowed for no tax in bank accounts. They will get report of every account. He also said that Income Tax department will study all deposits made in banks. In case people having higher amount than 2.5 Lakhs, Income Tax department will take further action over them. People who will be depositing more that 2.5 Lakhs will be considered as tax theft.

Here in this article we are explaining to you that how much amount will be charged extra if you deposit amount between 2.5 Lakhs to 1 Crore.

Contents

Case 1 : If Someone Deposits 2 Lakhs to 2.5 Lakhs

Tax applicable will be 0 rupees. Amount of Rs.2.5 lakhs is allowed to deposit in bank. Hence, No Tax will be applicable.

Case 2 : If Someone Deposits upto Rs.5 Lakhs

  • 10% Tax will be applicable on amount exceeding 2.5 Lakhs. 
  • So 10% charge will be 25,000 (Total Tax) on 2.5 Lakhs.
  • 200% Penelty will be charged over Tax. 25,000×2=50,000 (Penalty on tax)
  • So Total Tax + 200% Penalty = 75,000
  • 75000 will be paid to government as fine.

Case 3 : If Someone Deposits upto Rs.10 Lakhs

  • No tax will be applicable on first 2.5 Lakhs.
  • On Second 2.5 lakhs tax will be applicable @ 10%. So, the amount of tax is 25,000
  • On Next 5 Lakhs, tax will be applicable @ 20%. So, the amount is 1,00,000
  • Total tax is Now (25,000 + 1,00,000) is 1,25,000.
  • 200% Penalty makes it 2,50,000
  • Now total tax is 2,50,000 + 1,25,000 = 3,75,000

Case 4 : If Someone Deposits upto 20 Lakhs

  • No tax will be applicable on first 2.5 Lakhs.
  • 10% tax will be applicable on next 2.5 Lakhs which means 25,000
  • 20% Tax will be applicable on next 5 Lakhs which means 1,00,000
  • 30% Tax will be applicable on next 10 Lakhs which means 3,00,000
  • So total tax is 25,000 + 1,00,000 + 3,00,000 = 4,25,000
  • 200% penalty  = 8,50,000
  • Total tax now is 4,25,000 + 8,50,000 = 12,75,000

Case 5 : If Someone Deposits upto 30 Lakhs 

  • No tax will be applicable on first 2.5 Lakhs.
  • 10% tax will be applicable on next 2.5 Lakhs which means 25,000
  • 20% Tax will be applicable on next 5 Lakhs which means 1,00,000
  • 30% Tax will be applicable on next 20 Lakhs which means 6,00,000
  • So, Total tax is 25,000 + 1,00,000 + 6,00,000 = 7,25,000
  • 200% Penalty = 14,50,000
  • Total Tax now is 7,25,000 + 14,50,000 = 21,75,000

Case 6 : If Someone Deposits upto 40 Lakhs 

  • No tax will be applicable on first 2.5 Lakhs.
  • 10% tax will be applicable on next 2.5 Lakhs which means 25,000
  • 20% Tax will be applicable on next 5 Lakhs which means 1,00,000
  • 30% Tax will be applicable on next 30 Lakhs which means 9,00,000
  • So, Total tax is 25,000 + 1,00,000 + 9,00,000 = 10,25,000
  • 200% Penalty = 20,50,000
  • Total Tax now is 10,25,000 + 20,50,000 = 30,75,000

Case 7 : If Someone Deposits upto 50 Lakhs

  • No tax will be applicable on first 2.5 Lakhs.
  • 10% tax will be applicable on next 2.5 Lakhs which means 25,000
  • 20% Tax will be applicable on next 5 Lakhs which means 1,00,000
  • 30% Tax will be applicable on next 40 Lakhs which means 12,00,000
  • So, Total tax is 25,000 + 1,00,000 + 12,00,000 = 13,25,000
  • 200% Penalty = 26,50,000
  • Total Tax now is 13,25,000 + 26,50,000 = 39,75,000

Case 8 : If Someone Deposits upto 1 Crore (100,00,000) 

  • No tax will be applicable on first 2.5 Lakhs.
  • 10% tax will be applicable on next 2.5 Lakhs which means 25,000
  • 20% Tax will be applicable on next 5 Lakhs which means 1,00,000
  • 30% Tax will be applicable on next 90 Lakhs which means 27,00,000
  • So, Total tax is 25,000 + 1,00,000 + 27,00,000 = 28,25,000
  • 200% Penalty = 56,50,000
  • Total Tax now is 28,25,000 + 56,50,000 = 84,75,000
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