Entities who deposited huge cash post note ban on I-T radar

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The first set of notices will go to those who deposited over Rs 50 lakh but didn't file any tax return or when their transactions were flagged by the tax department through advisories they chose not to respond.

One lakh entities and individuals who deposited large amounts of cash in banks hoping to escape demonetisation crackdown will soon receive notices from the income tax (I-T) department. These are cases wherein cash was deposited beyond their prior income tax returns. The I-T department said that there are lot of discrepancies in the cases.

The first set of notices will go to those who deposited over Rs 50 lakh but didn't file any tax return or when their transactions were flagged by the tax department through advisories they chose not to respond.

A senior income tax official said, "Notices to such 70,000 entities and individuals are likely to start getting issued as early as the end of this week."  The I-T sleuths will then target 30,000 entities and individuals who made large deposits and filed tax returns which were hugely different from their past returns. Some also made large transactions after demonetisation.

India Today had on Tuesday reported that the I-T department has chosen 20,572 tax returns for scrutiny post demonetisation announced by Prime Minister Narendra Modi on November 8 last year.

The notices are  part of the tax department's 'Operation Clean Money' initiated in January this year to check black money.

As a follow up action, the department will start sending notices to those who deposited between Rs 25 lakh and Rs 50 lakh after demonetisation.  

The notices will be issued under Section 142 (1) of the I-T Act (inquiry before assessment), sources said.

The income tax department has identified 18 lakh suspicious transactions involving Rs 4 lakh crore through 23.22 lakh bank accounts post withdrawal of legal tender status to Rs 500 and Rs 1,000 denomination notes.  Speaking at India Today conclave, Finance Minister Arun Jaitley had said, "It is a continuous process. Let's not tie ourselves to numbers... CBDT (Central Board of Direct Taxes) has been able to identify 1.8 million people."

Jaitley said that more than the process, the message of demonetisation is important that "it is no longer safe to deal with so much cash". He even mentioned how technology is helping post-demonetisation.