Demonetisation: I-T notices already sent to those depositing huge cash

Acting swiftly, the income-tax department has issued hundreds of notices seeking "source" of funds from individuals and firms that have since November 8 deposited huge amounts of cash at banks using the scrapped Rs 500 and Rs 1,000 currency notes.

Officials said the taxman had begun a countrywide inquiry in this regard and had issued notices under Section 133 (6) of the Income-Tax Act (power to call for information) in various cities and towns of the country.

They said the notices were issued after banks reported to it certain cases of "unusual or suspicious volumes of cash deposits" in their accounts, primarily beyond Rs 2.5 lakh.

"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 eight 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.

READ OUR FULL COVERAGE ON THE MODI GOVT'S DEMONETISATION MOVE

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel