Black money crackdown: Unexplained transactions could now invite penal provisions under Benami ActPeople with unexplained credits and investments reflecting on their I-T returns could earlier get away by offering higher tax on the amount.
Individuals and businesses whose income tax filings show unexplained deposits and investments may have invite proceedings under the stringent provisions of the Benami Act.
As per existing practice, unexplained credits and investments are dealt as black money and attract a tax rate of 80 per cent of the amount. All that and more could change now.
The invoking of the Benami Act would mean that people who would otherwise get away for unexplained deposits by offering to pay high taxes would potentially face penal and criminal consequences.
The Income Tax department, it is learnt, is undertaking a scrutiny of all unexplained credits and investments in personal as well as corporate income-tax filings and could invoke the Benami Act in many cases.
Tax officers are involved in examining whether such unexplained transactions have been carried out at the behest of another person – or benami – and are seeking information to ascertain the source of such credits and transactions, the Economic Times reported.
According to tax officials, unexplained credits and investments have gone up drastically following the government’s demonetisation decision.