Taxman To Go Easy On Post-Demonetisation Deposits Of Up To Rs 5 Lakh By Over 70-Year Olds
However, the limit has been fixed at Rs 2.5 lakh for other individuals.
The income tax (IT) department will not carry out any further verification for cash deposits up to Rs 5 lakh made by people above 70 years of age post government’s decision to ban old high-value currency notes, but the limit has been fixed at Rs 2.5 lakh for other individuals.
“There is absolutely no cause for panic. We are not going after everyone who deposited their holding of the demonetised currency in bank accounts between November 8 and December 30, 2016. Very clear thresholds have been set for tax department to take up deposits for verification. I repeat, it is for verification and not scrutiny or assessment,” a senior finance ministry official said.
The official also said that these verifications are being sought to be done online and any person of up to 70 years of age, who has deposited more than Rs 2.5 lakh in cash, has to go to I-T department website and explain the source of deposit. If the deposits match with previous income tax returns, the verification will be closed at that stage itself, he said, adding that only if a depositor does not verify, or there is suspicion on deposits not matching with known sources of income, will further clarifications be sought.
“The threshold for further verification of cash deposits is Rs 2.5 lakh for persons up to 70 years age, and Rs 5 lakh for taxpayers above 70 years where the source of such deposits is household savings and savings from past income and the individual does not have any business income,” he said.
The official said that even the further non-statutory clarifications will be sought without issuing a show-cause or any notice. “No inquiry or third party verification will be initiated outside the e-verification.” The online verification of deposits made is being done to reduce compliance cost for persons under verification, he said.
Emails and SMSes were sent to persons under verification for submitting online response on the e-filing, he said, adding that those who have not yet registered on the e-filing portal must do so immediately.
Individuals receiving SMS or emails from I-T department would be required to electronically file response on e-filing portal which shall be examined and monitored electronically by the department through Online Verification platform ITBA. The tax department had launched a massive operation to catch evaders who deposited unaccounted cash in junked 500 and 1,000 rupee notes in bank accounts post demonetisation.
Deposits of above Rs 2 lakh, totalling Rs 10 lakh crore, were made post-demonetisation. Of this, Rs 4.5 lakh crore is under verification.
In the first phase of the project code named ‘Operation Clean Money’, the department sent SMS or emails to 18 lakh people who made suspicious deposits above Rs 5 lakh during the 50-day demonetisation period. Over 7 lakh people have replied in e-filing portal and acknowledged to have made such deposits.
The second phase of the project will begin next month after data analytics firms conduct Big Data analysis matching I-T data with the Statement of Financial Transaction (SFT) report from banks, officials said.