CAN I USE OLD RS2,000 NOTES TO BUY JEWELLERY IN INDIA?

On December 28, 2020, the government issued a notification to bring the gems and jewellery sector under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. The effect of this notification is that jewellers and others who sell jewellery have been made reporting entities under the PMLA. This requires them to comply with KYC norms in respect of cash transactions whereby the buyer of gold or jewellery will be required to furnish his permanent account number issued by the Income-tax Department and provide certified copy of the PAN Card.

Any cash transactions of Rs1 million or above are required to be reported to the tax department. Further, under section 269 ST of the Income tax Act, sellers of gold or any other asset are prohibited from receiving an amount of Rs200,000 or more either in respect of a single transaction or in aggregate from the same person in a day in cash. In other words, the seller of gold, jewellery or any other asset can enter into a transaction of Rs200,000 or more only by receipt of an account payee cheque or bank draft or through a prescribed electronic mode. If the seller of any asset receives cash of Rs200,000 or more for a transaction, he would be liable to penalty under section 271-D of hundred percent of the amount received in cash. Therefore, nobody will enter into a cash transaction accepting Rs2000 notes or notes of any other denomination where the value of the transaction is Rs200,000 or more.

It is expected that by 2024, India will have around 100 semi-conductor design start-ups. At present, about 30 such start-ups have already started successfully. According to the Minister of State for Electronics & Information Technology, the country is establishing its footprint in the global supply and value chains. Further, a semi-conductor research centre will be established, which will bring about chip and electronics innovation. According to reports, two top Taiwanese companies are making huge investments. Around $500 million will be invested in a new manufacturing facility near Hyderabad. This is likely to create around 25,000 direct jobs in the first phase of operations.

According to guidelines recently issued by the Central Board of Direct Taxes, cases are required to be taken up for scrutiny only where there is specific information indicating tax evasion. Otherwise, a very small percentage (around 2 per cent) of income tax returns are picked up for scrutiny at random. However, where a search or survey operation has been undertaken, the scrutiny of returns is mandatory. This is subject to specific parameters which are laid down.

Approval of a Commissioner of Income Tax is required before the notice for reopening of an assessment is issued. The government is also trying to expand the tax base by collecting information of persons who incur expenditure on high value assets, including immovable properties and motor cars. Expenditure on foreign travel is also being monitored through the mechanism of tax collected at source. A lot of data and information has been secured by the tax authorities through the network of the Goods & Services Tax. The endeavour is to ensure that the income disclosed by a tax payer in his tax return is commensurate with his business activities and the expenditure which has been incurred.

2023-06-06T12:16:03Z dg43tfdfdgfd