Beware!

Operation “Clean Money” is underway…

In the first wave of scrutiny, the Income-Tax (I-T) Department had identified nearly 17.92 lakh people who were questioned about their deposits. About 9.72 lakh people have already submitted their online responses.

Recently, the I-T Department sent SMS’ and emails additionally to nearly 5.5 lakh citizens, seeking an explanation.

Their deposits during demonetisation didn’t tally with their tax profile.

And it won’t end here. The I-T Department is likely to send out emails to many more suspected tax evaders. In the second wave of ‘Clean Money’, the Department is currently targeting high-risk clusters and attempting to unearth shell companies. In the near future, more people and entities will be grilled on their transactions. While this exercise is being managed centrally, regional I-T offices are also designing strategies in-sync with the mission ‘Clean Money’.

Speaking about the development, Mr Sushil Chandra—Chairman, Central Board Of Direct Taxes (CBDT) said, "Huge opportunities for identification of potential taxpayers have been opened up by data mining and data analytics in the wake of demonetisation and Operation Clean money,"

"About 91 lakh taxpayers were added during FY2016-17. Considering the increase in economic activities, both in the organised as well as unorganised sectors, there is a large scope for further widening of the direct tax base in the country”, he further added.

The I-T Department has already made it mandatory for the assessees to disclose deposits of more than Rs 2 lakh added to their bank accounts during demonetisation. This has been a shock to many taxpayers—especially those under the department’s scanner—considering the Prime Minister had categorically said that deposits up to Rs 2.5 lakh wouldn’t be questioned. "This is just an effort to ascertain what deposits were made during the demonetisation period. The Department has not issued notices in cases where the deposit amounts were small" —a PTI report clarified in response.

It seems demonetisation has begun to yield results. In FY 2016-17, the base of taxpayers expanded nearly 25%. In FY 2015-16, close to 3.7 crore individuals had filed income tax returns. The number grew by 91 lakh in FY 2016-17.

If you are yet to file an income tax return, do it at the earliest. Also, you must precisely disclose the cash deposits you made during demonetisation to avoid inconvenience in future. During the first round of e-verification of doubtful accounts, it was observed that nearly 1.04 lakh people didn’t disclose all their bank accounts. Avoid such practices, for if you fail to provide an explanation on deposits, it will be treated as black money and will be made subject to a substantial penalty of 77.25%. Additionally, you may also have to pay 10% penalty and face prosecution as well.

Filing Income Tax returns before due date helps you:
 

• Carry forward losses
• Get refunds quickly
• Get loans quickly
• And more importantly, live stress-free
   

Think twice before you try to conceal your income and evade taxes. The I-T Department is tracking your actions closely. And, remember, PAN and Aadhaar are linked now, with all banks having made it mandatory to link Aadhaar to your account. This makes it almost impossible for anyone to pass unnoticed under the taxman's scanner.

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