Taxman To Go Easy On Up To Rs 5 Lakh Deposits By 70-Plus People

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 notes ban.

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The tax 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 notes ban, 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.

Taxman To Go Easy On Up To Rs 5 Lakh Deposits By 70-Plus People

If the deposits match with previous income tax returns, the verification will be closed at that stage itself, he said adding 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. No Threat To Taxpayers Under 'Operation Clean Money'

"The threshold for further verification of cash deposits is Rs 2.5 lakh for persons upto 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.

Email and SMSes were sent to persons under verification for submitting online response on the e-filing, he said, adding those who have not yet registered on the e-filing portal must do so immediately. Jewellery Purchase Above Rs 2 Lakh To Attract Tax From April 1

Individuals receiving SMS/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 demonetization. Deposits of above Rs 2 lakh, totalling Rs 10 lakh crore, were made post-demonetization. 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/emails to 18 lakh people who made suspicious deposits above Rs 5 lakh during the 50-day demonetization 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.

Goodreturns.in 

Read more about: demonetization, taxman, deposits
Story first published: Wednesday, February 22, 2017, 16:27 [IST]
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