The Central Board of Direct Taxes has cracked down on 18 lakh people who made suspicious deposits of over Rs 5 lakh during the 50-day demonetisation period, as part of its Operation Clean Money. Here is how taxmen are expected to further investigate these possible cases of black money and tax evasion.
- Individuals are exempt from verification for deposits of up to Rs 2.5 lakh (other than minors). No verification required for deposits of Rs 5 lakh for those over the age of 70 years.
- In case of cash receipts from exempt income such as agriculture, officials will verify these against earlier returns. They may also seek information on land holdings, etc.
- I-T may seek bank statements to cross-check individuals’ bank withdrawals.
- Those claiming cash receipts from third party as ‘gifts’, may be asked to pay tax.
- No need for additional information for those in business if cash holdings are lower than level at the end of March 2016.
- Assessing officer will verify if cash transactions are in line with normal practice by seeking data on monthly sales, stock register entries, bank statements.
- Investigators will look at abnormal jump in cash sales during November-December 2016 and tally it with sales history.
- More than one deposit of scrapped Rs 500 and Rs 1,000 notes closer to Dec 30 deadline may trigger attention
- Non-availability of stock or attempts to inflate stocks by introducing fictitious purchases will also attract scrutiny.
- Transfer of cash deposits to another entity or account which is not in line with earlier history may invite queries.
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