Get Ready to Pay Hefty Tax Penalty on Deposits Above Rs. 2.5 Lacs

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With Prime Minister Narendra Modi providing the most deadly onslaught to black money hoarders by demonetizing the Rs. 500 and Rs. 1,000 notes on Nov 8, 2016, the perpetrators of the menace are caught napping and finding it hard to deal with the issue. However, the government has allowed the exchange of such notes at banks and post offices across India from Nov 10 to Dec 30, 2016. A cash deposit of above Rs. 2.5 lacs is subject to intense income tax scrutiny, with 200% penalty being levied on the unaccounted income. I sincerely hope, you do not have any undisclosed income. But individuals with a large pile of undisclosed income are all set to sink deeper and deeper as the time goes along. Here is how the penalty will come to hit the pocket black money perpetrators.

Deposit AmountTax & Penalty
Rs. 2 Lacs-2.5 LacsTax-NIL
Rs. 5 LacsFirst 2.5 Lacs-No Tax

Tax @ 10% on Rs. 2.5 Lacs-25,000

200% Penalty on Rs. 25,000= Rs. 50,000

Total Effective Tax Payable= Rs. 75,000
Rs. 10 LacsFirst 2.5 Lacs-No Tax

Tax @ 10% on Rs. 2.5 Lacs= Rs. 25,000

Tax @ 20% on Rs. 5 Lacs= Rs. 1,00,000

Tax= Rs. 1,25,000

200% Penalty on Rs. 1,25,000= Rs. 2,50,000

Total Effective Tax Payable= Rs. 3,75,000
Rs. 20 LacsFirst 2.5 Lacs-No Tax

Tax @ 10% on Rs. 2.5 Lacs= Rs. 25,000

Tax @ 20% on Rs. 5 Lacs= Rs. 1,00,000

Tax @ 30% on Rs. 10 Lacs= Rs. 3,00,000

Tax= Rs 4,25,000

200% Penalty on Rs. 4,25,000= Rs. 8,50,000

Total Effective Tax Payable= Rs. 12,75,000



Rs. 30 Lacs








First 2.5 Lacs-No Tax

Tax @ 10% on Rs. 2.5 Lacs= Rs. 25,000

Tax @ 20% on Rs. 5 Lacs= Rs. 1,00,000

Tax @30% on Rs. 20 Lacs= Rs. 6,00,000

Tax= Rs. 7,25,000

200% Penalty on Rs. 7,25,000= Rs. 14,50,000

Total Effective Tax Payable= Rs. 21,75,000
Rs. 40 LacsFirst 2.5 Lacs-No Tax

Tax @ 10% on Rs. 2.5 Lacs= Rs. 25,000

Tax @ 20% on Rs. 5 Lacs= Rs. 1,00,000

Tax @30% on Rs. 30 Lacs= Rs. 9,00,000

Tax= Rs. 10,25,000

200% Penalty on Rs. 10,25,000= Rs. 20,50,000

Total Effective Tax Payable= Rs. 30,75,000

Rs. 50 LacsFirst 2.5 Lacs-No Tax

Tax @ 10% on Rs. 2.5 Lacs= Rs. 25,000

Tax @ 20% on Rs. 5 Lacs= Rs. 1,00,000

Tax @ 30% on Rs. 40 Lacs= Rs. 12,00,000

Tax=Rs. 13,25,000

200% Penalty on Rs. 13,25,000= Rs. 26,50,000

Total Effective Tax Payable= Rs. 39,75,000
Rs. 100 Lacs
First 2.5 Lacs-No Tax

Tax @ 10% on Rs. 2.5 Lacs= Rs. 25,000

Tax @ 20% on Rs. 5 Lacs= Rs. 1,00,000

Tax @ 30% on Rs. 90 Lacs= Rs. 27,00,000

Tax=Rs. 28,25,000

200% Penalty on Rs. 28,25,000= Rs. 56,50,000

Total Effective Tax Payable= Rs. 84,75,000
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