I-T officials probing ‘excess’ cash deposits

The Income Tax (I-T) department has started sending notices seeking the “sources of income” of those who deposited black money in excess of Rs 2.5 lakh in their bank accounts after the demonetisation announcement of 8 November 2016.

An I-T official said: “Our department has started sending notices after a nationwide inquiry under Section 133 (6) of the Income Tax Act (power to call for information). The notices were issued to individuals and firms after banks reported ‘unusual or suspicious’ volumes of cash deposits in their bank accounts.”

“The notices are in the form of summons to people having income mismatch with the cash deposits in their bank accounts. The people who have been sent notices are expected to produce the book of accounts along with bills/vouchers or documents to explain the cash deposits after demonetisation,” the official said.

The notices mention the dates and amounts deposited by individuals and firms in old currency and seek the furnishing of the books of accounts with the I-T department. “If your income has been assessed, you shall also file the copy of Income Tax Return of the last two years,” a notice reads.

A 10-day time limit for explanation of their book of accounts has also been given and if a person fails to comply with the deadline, the case will be dealt with properly under I-T law, according to the notice.

According to the I-T department, in the first phase of investigation, it was found that almost 10 lakh individuals and firms have deposited cash in excess of Rs 2.5 lakh over and above what they had revealed to the I-T department in the same year. “Cash deposits above Rs 2.5 lakh could attract tax and penalty and authorities might take away 90% of the money if there is an income mismatch, according to the government’s decision,” an official told The Sunday Guardian.

Another I-T official said, “We are sending notices by post to those persons and firms who are not connected online with the department.”