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Demonetisation: Income Tax issues notices to those depositing huge cash, seeks ‘source’ of funds

Currently reading: Demonetisation: Income Tax issues notices to those depositing huge cash, seeks ‘source’ of funds
India TV Business Desk, New Delhi [Published on:19 Nov 2016, 20:27:56]

Ten days after demonetisation of Rs 500 and Rs 1,000 notes was announced, the Income Tax department has started cracking the whip on people depositing huge amount of cash using scrapped notes.

The department has issued hundreds of notices seeking ‘source’ of funds from individuals and firms who have deposited huge amounts of cash in banks.

Officials said that the taxman has begun a country-wide enquiry in this regard and has issued notices under section 133 (6) of the Income Tax Act (power to call for information) in various cities and towns of the country.

"The notices are being issued where the department feels the cash deposits made in the demonetised currency is suspect. This is part of the vigil that the taxman has deployed to check instances of tax evasion, money laundering and black money in the wake of the demonetisation of the two high denomination currencies on November 8," they said.

The notices issued by the department cite the date and amount deposited by an entity in the old currency in the bank as it goes on to seek ‘supporting documents, books of accounts and bills to explain the said cash deposits’ from them.

"If you are assessed to Income Tax, then you shall also file the copy of Income Tax Return of last two years," an I-T department notice issued in this regard said.

In the wake of the demonetisation declared by Prime Minister Narendra Modi on November 8, the department has also stepped up its survey operations against real estate players, bullion traders and suspected hawala operatives to check the illegal use of the scrapped currency and subsequent generation of black money.

The taxman has also deployed a similar check at cooperative banks and in one case in Mangalore it found that old currency worth Rs 8 crore was exchanged by five societies which had accounts in a cooperative bank there.

The department has also recently issued notices to hundreds of charitable and religious organisations in the country enjoying exemptions on tax paid to inform it about their cash balances as of November 8 when the government demonetised Rs. 500 and Rs. 1,000 currency notes.

The notices were issued in order to keep a check on possible "accommodation" of black money in old currency by way of making charitable contributions or donations to these organisations.

With PTI Inputs

Representational pic - I-T issues notices to those- India Tv
Representational pic - I-T issues notices to those depositing huge cash