Do you also have a lot of unaccounted money in the house-office, or is there a lot of money in the bank account and if you are not able to give the source, the Income Tax Department can charge you a hefty tax of up to 84 percent. Income Tax assessing officers can find out about unaccounted money or sometimes only the person who has the money in his income tax return gives it to himself. In both cases, under section 115BBE of income tax, this money can be taxed at a special rate.
If the taxpayer's ITR shows any income which has not been reported as a source and the assessing officer catches it, the provisions of section 115BBE of income tax will be prescribed. If you make a large number of transactions, it cannot be avoided from the point of view of income tax. Many institutions like banks, mutual funds, brokers, property registrars keep reporting huge amounts of transactions to the Income Tax Department. If these transactions do not match the details in your income tax return, the Income Tax Department may send you a notice.
If you are not able to account for the huge cash or huge amount deposited in the bank account with you, you can be fined and the tax assessing officer can collect a hefty tax of up to 84 percent. In fact, in addition to raising unaccounted money, a surcharge of 25 percent is levied on this tax. In addition, a penalty of 6 percent can also be imposed on it.
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