Income Tax department expands list of deposits, transactions under scrutiny

TNN

New Delhi: The income tax department has expanded the list of high-value financial transactions that have to be reported by banks, companies, post offices and businesses to include cash deposits of Rs 2.5 lakh or more during the demonetisation period.

 

While the Rs 2.5 lakh threshold is for deposits made by individuals across all bank accounts, the floor for current account holders has been fixed at Rs 12.5 lakh. Banks will also have to report all cash deposits and fixed deposits above Rs 10 lakh made during the year.

 

For these depositors, the Central Board of Direct Taxes (CBDT), which released the detailed guidelines on Tuesday, has also sought details of all deposits made since April. Bank drafts and prepaid instruments of Rs 10 lakh or more purchased using cash will also have to be reported to the tax department. The latest measures from the tax department are expected to help honest tax payers breathe easy as a threshold has been fixed below which the authorities are unlikely to harass individuals.

 

The government’s move to scrap some high value notes in early November and its drive against black money has triggered concern about possible harassment of taxpayers by authorities.

 

Over the years, the govern ment has been collecting information on high value transactions which are tallied with tax returns of individuals and companies to ensure there is no tax evasion. In recent years, several transactions without a permanent account number (PAN) have been detected where the government has sought details from taxpayers and also realised unpaid taxes.

 

The fresh guidelines from the tax department are part of the government’s drive against black money . Post-demonetisation, there has been he ightened scrutiny by the authorities to plug any evasion and ensure that individuals and companies have not turned black money into white using the banking and financial system. The tax department has already amassed huge data on large cash deposits. Officers are poring through the numbers and emphasis is on high value deposits, and those in dormant and Jan Dhan accounts. In addition, special attention is being paid to cooperative banks, some of which have come under the scanner.