No I-T Scanner On Deposits Of Up To Rs 2.5 Lakh By Housewives After Demonetization, Rules ITAT

Cash deposits of up to Rs 2.5 lakhs by housewives after demonetisation will not come under income tax scrutiny, the Income Tax Appellate Tribunal (ITAT) has ruled.

The ITAT ruling provides relief to those housewives, who were forced to deposit their personal savings in bank accounts in the aftermath of the government’s move to render high-value currency notes of Rs 500 and Rs 10,00 invalid, on November 8, 2016, though demonetisation.

The order by the Agra bench of the tax appellate tribunal comes on a plea filed by one Uma Agarwal, who had declared a total income of nearly Rs 1.31 lakhs in her income tax return filed for FY17. After demonetisation, Agarwal deposited over Rs 2.11 lakhs in cash in her account.

When asked to explain the deposit, Agarwal told the commissioner of income tax (appeals) that it was the savings she created using the money she received from her husband, son and relatives. Her explanation was rejected by the CIT (Appeals) and it directed the assessing officer's order to treat the deposit as 'unexplained money'. Following this, Agarwal moved the ITAT to challenge the CIT (Appeals) order.

While stating that housewives' contribution in families is 'immeasurable', the bench said: "We are of the opinion that the amount deposited by the assessee during the demonetisation cannot be treated as income of the assessee. Hence the appeal of the assessee is allowed."

While exempting women, who deposited less than Rs 2.50 lakhs during the demonetisation period, the ITAT said that its decision might be treated as a precedent in respect to the proceedings arising out of the cash deposits of up to Rs 2.5 lakhs made by housewives after the note ban.

"Women all over the country, had been accumulating cash that they had saved for themselves from household budgets, by haggling with vegetable sellers, tailors, grocers and assorted traders... (this happened after) years of stashing in whatever little cash gifts they received from relatives during festival times and years of tucking away the change they found in the pants that they washed every day. Suddenly they were left with no option but to deposit the amount in the denomination of Rs 500 and Rs 1,000 notes in the banks on account of the demonetisation scheme 2016, (as) these notes were no more legal tenders," the tribunal observed.

The ITAT also quoted an order by the Supreme Court, in which the apex court noted that nearly 159.85 million women mentioned 'household work' as their main occupation as compared to only 5.79 million men, according to Census 2011.

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Modi's Demonetisation Move Has Left Indian Housewives 'Heartbroken'

“You must already be feeling like a millionaire, no?” Tania quipped with a hint of sarcasm in her voice as she spoke to her mother, Sunaina. This dig was about the Narendra Modi government's recent move to demonetise Rs 500 and Rs 1,000 notes.

Tania Mehra, 24, usually argued with her mother over politics. The two often got into heated arguments over it, and had agreed to disagree on everything political.

So, when Prime Minister Narendra Modi on November 8 announced scrapping of Rs 500 and Rs 1000 currency notes, the daughter knew she had a great opportunity to ruffle up her homemaker mother.

Sunaina, 57, is on-the-whole quite happy with the state of affairs of the country ever since Narendra Modi came to power. Not one to abandon her beliefs so quickly, Sunaina argued in favour of demonetisation. She said it will increase transparency in cash deals and bring down black money. However, the move had left Sunaina worried too. 

Like most financially prudent housewives, she has some 'loose cash' that she has saved over a period of time. The outcome of several years of haggling with sabziwallahs, the local baniya, and autowallahs – in short, everyone from whom she was able to extract a good bargain – the little kitty of her savings is her prized asset. At home, she always preferred cash to clichéd gifts from her husband on festivals. This Karva Chauth, for example, when she kept a fast for the long life and well-being of her husband, Mayank Mehra, she secured a neat Rs 20,000 as a gift. Besides, over the years, she received and set aside many small sums of cash from her husband, as and when “required”.

With years of financial planning and perseverance, her stash of cash has grown steadily. She has always been secretly proud of her ability to save. It is a handy 'investment' to fall back on whenever she needs a bit of extra cash, but suddenly it has all been rendered useless. 

Interestingly, none of her family members know the quantum of her prized savings. With a heavy heart, she will now have to make disclosures about her fortune. She feels quite embarrassed as she looks back: She had desisted from pitching in when her husband was buying a second home five years ago. If she had contributed, Mayank Mehra would not have had to apply for a loan. But she had other plans; she wanted to use it for her daughter's wedding.

But now, she would either have to stand in long queues, deposit the money in a bank account, and attract the attention of the taxman, or just let it all turn into worthless pieces of paper. As she tries to make up her mind, she remembers her PM's appeal: "It is for the larger good of the country. It will cause some hardship to you … Let us ignore these hardships … In (the) country's history, there comes a moment when people want to participate in nation-building and reconstruction. Very few such moments come in life.” This thought, however, does not seem to fully eliminate the pangs – both emotional and financial – but Sunaina is coming to terms with it.

She is not alone. In the aftermath of the demonetisation move, housewives across India are facing a similar predicament. They are all busy counting their own personal wealth before they make a disclosure – first to their respective families and then to the government.

Dr Renu Gupta (name changed on request), a psychologist at a government hospital in Delhi, says: “Modi's announcement could be a cause for broken hearts in many households (chuckles). Housewives generally keep their savings hidden even from their husbands. The insecurity of not being a working woman can be quite underwhelming. This is their way to keep themselves financially secure and independent.”

The term 'Desperate Housewives' has taken on a new meaning in India, thanks to PM Modi. 

Also Read: How Demonetisation Will Cure Realty Of Many Ailments In Long Term