Up to 18 lakh people asked to provide info about source of cash deposited after note ban, but no notices sent out yet
Over 2 lakh people logged on to the website of the income tax department, which has sought clarifications from 18 lakh people who deposited large sums of cash after demonetisation.
As many as 60,000 have responded and some have even agreed to pay tax, said Sushil Chandra, chairman of the Central Board of Direct Taxes, clarifying that no notice has been sent to anyone as yet.
“It's a request for e-verification of their accounts and an explanation,“ said Chandra.
The department expects to hear from most of the people who have been sent the requests by March 31, failing which formal notices under the income tax law will be sent to them. “The department will have to issue notices and make assessments,“ said Chandra.More requests for information are likely to go out soon as deeper data mining starts, he said.
REQUEST FOR INFORMATION
The 18 lakh people have merely been asked to provide information in a non-intrusive manner.The department has put out details about the depositor such as the bank account and the amount deposited and wants an explanation about the source of the cash.
Structured response options have been framed so that people can clarify whether the deposit was from an earlier withdrawal from a bank account or part of exempted income. They can state if the account holder is an agricultura is an agriculturalist or if the money was a gift from someone who provided a PAN.
If no appropriate explanation is suggested, responses can be made in the `others' option. If the department is not satisfied with the answers, it may provide more opportunities to explain.
Respondents will also have a chance to avail of the Pradhan Mantri Garib Kalyan Yojana (PMGKY) before March 31.
NON-INTRUSIVE PROCESS
Chandra said the department has become more taxpayer-friendly over the years, explaining why it opted for this method even though one purpose of demonetisation was to unearth black money.
“We did not want to create a panic,“ he said, adding that honest taxpayers should not be troubled.
“There was a time when every case was being scrutinised. Now we scrutinise less than 1%. Now even if I want a case, I don't have the power. No one has the discretion to pick a case for scrutiny,“ he said, explaining the changes.
Chandra said there is no target for PMGKY and genuine taxpayers have no reason to worry.
“No targets have been fixed. No harassment. No fishing enquiry.But tax evasion should be caught.Genuine person should not feel any fear, but tax evaders should,“ he said.
Only if the explanation is not satisfactory and a person does not opt for PMGKY will the department issue notices and assess the depositors for tax.
OUTSIDE DATA MINERS
The income tax department is hiring outside agencies to carry out more advanced mining of the data collected. The government scrapped `500 and `1,000 notes on November 9 and asked for all the invalidated notes to be deposited by the end of December 2016.
“We are shortlisting certain agencies for specialised data mining. Preliminary data mining has been done,“ said Chandra.
The 18 lakh people asked to submit information based on the preliminary data analysis are those who deposited more than `5 lakh cash after demonetisation, a sum that is considered inconsistent with their profile with the inco me tax department. “Like if you have not filed a return and deposited `5 lakh, so the department found it suspicious. Or if you have filed a return of Rs 2.5 lakh and deposited `10 lakh,“ said Chandra. The list includes those who have not filed tax returns and have deposited large amounts.
The more advanced data mining is expected to unearth more names. As of now, the department has not looked at deposits below `3 lakh. Explanations will be sought regarding suspicious transactions reports (STRs) and from people who have opened new accounts, said Chandra.
The data mining will also look for trails of cash being split across multiple accounts or deposited in the names of various family members.
“We will be using advanced data mining tools. See from which one number, telephone, same address,“ said Chandra, adding that there is a large amount of data to work with. The department will also look at deposits into credit card accounts and other loans.
“We've asked from banks wherever more than `2 lakh has been deposited during this particular period and bankers are reporting to us. If anything has been misused, it would come to our notice. Some Jan Dhan accounts have been converted into regular ones,“ he said.
Economic Times New Delhi,13th Febuary 2017
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