Income Tax: This is how you can show Rs 2 lakh deposit transaction in ITR copy

It is the last week to file Income Tax Return (ITR) for the financial year 2017. To make sure that all the entries are done properly, do not forget to double check.

While the process has not been changed much, taxpayers should also not forget to show one "important" transaction this time. 

On November 9, while Prime Minister Narendra Modi had announced the ban on Rs 500 and Rs 1000 notes, he had mentioned that individuals who are depositing Rs 2 lakh or more during demonetisation period, will have to show it while filing ITR. 

“Tax return forms ask the taxpayer to report details of all their bank accounts (except dormant one). This year the department has added a new column where the taxpayer’s will have to report the details of cash deposited in their bank accounts (including loan account) if the aggregate cash deposits for all accounts exceeds  Rs.2 lakh during the demonetisation period (09/11/16 to 30/12/16)," the notification had said.

Chetan Chandak, Head of Tax research, H&R Block India, said that it is not just about reporting the details of cash deposited but taxpayers will also have consider its tax. 

In case these deposits represents the income earned for the current year or any of the earlier years (remaining unreported), then taxpayer should ensure that they consider it for the tax computation. If these deposits represent the current year’s income then it should be added to the appropriate head of income and calculate the taxes accordingly. But in case if it is previous unreported income then they can consider reporting it under section u/s 115BBE and pay the taxes @ 60%.