Hoarders find a hole in Income Tax Act

Bengaluru: Despite Prime Minister Narendra Modi's action to strike at black money hoarders, a loophole in the Income Tax Act allows these illegal stash keepers to escape action.

Majority of black money hoarders are now planning to take refuge under Section 270A of the Income Tax Act to safeguard their money and also escape punitive action. The section was added to the IT Act this year, financial experts said.

If unaccounted cash is deposited in banks and 33% tax, including surcharge, is paid on this additional income, no penalty for underreporting or misreporting can be imposed by the revenue officer under section 270A of the I-T Act, chartered accountants told Deccan Chronicle.