The latest tax amendments would certainly add to the discomfort already being faced since the banning of Rs 500 and Rs 1000 notes. (FILE PHOTO)

With an aim to further curb the flow of black money after the November 8, 2016 demonetisation move, the government made certain amendments in Income Tax laws giving additional powers to tax officials. As per the amendments, any taxpayer who fails to justify his or her income or expenditure will be liable for a whopping 83 per cent tax, up from 35 per cent.

Following demonetisation, the government had directed Income Tax officials to ensure that the common man is not harassed in the name of scrutiny of their income documents. However, the latest tax amendments would certainly add to the discomfort already being faced since the banning of Rs 500 and Rs 1000 notes.

Here are 5 instances where the new law could trouble taxpayers:

1. MONEY TAKEN FROM A FRIEND: Lending money to a friend could get you quizzed by the Income Tax Department. If one fails to provide sufficient explanation for income shown as money taken from a friend then he/she is liable to be taxed. The tax slapped on an individual would be same as imposed on those depositing unaccounted money in bank.

2. ANCESTRAL JEWELLERY: Amendments to the I-T laws do not seek to tax inherited gold and jewellery and also those items that are purchased through disclosed or agriculture income. However, one can come under the I-T radar if an individual fails to present sufficient evidence in support of such claims.

3. CAPITAL FUND FOR SMALL INDUSTRY: It is advisable for an individual to keep complete record of the seed money arranged for setting up of a small scale industry. Failing to submit the required details could spell trouble for you as the Income Tax Department may slap hefty tax on the capital amount you've arranged.

4. MONEY SPENT ON DAUGHTER'S WEDDING: Planning that 'grand Indian wedding' for your daughter? Think twice before splurging a huge sum, you may have Income Tax officials as uninvited guests. If the record of your bank balance doesn't support the money you've spent on the wedding function of your daughter, be prepared with an explanation for the Income Tax Department.

5. SUDDEN RISE IN MONTHLY SPENDING: If the department notices sudden rise in one's monthly spending after demonetisation (November 8, 2016), he/she may be inviting trouble. The department may scan your bank accounts and depending on the payments made through it ask you to explain the source of income. Failing to provide details may invite huge penalty.

WATCH: What are the new income tax rules okayed in Parliament to fight black money?

ALSO READ:

15 words to help you decode Arun Jaitley's forthcoming Budget

Budget on February 1: Here is wishlist of Dabbawalas for Mumbai local trains