Income Tax Dept warns public against cash dealings of Rs 2 lakh or more saying that the receiver of the amount will have to cough up an equal amount as penalty. CBDT further extends the time for Linking PAN with Aadhaar till 30th June, 2018.

Income tax base expands by 9.1 mn people after note ban: FM Jaitley

The government’s move to demonetise Rs 500 and Rs 1,000 notes has helped the authorities bring 9.1 million people under the tax net as money has lost its anonymity, Union Finance Minister Arun Jaitley said on Tuesday. This is roughly one-fourth of 37 million individuals who filed tax returns in 2015-16.

Launching a new website on ‘Operation Clean Money’, a programme to bring illegal wealth on the books, Jaitley said demonetisation had given a push towards digitisation and led to an increase in the number of assessees and tax revenues. The November 8 announcement had also instilled fear among people about dealing in cash, he said.

“One message has gone out clearly as per the steps taken by the CBDT post demonetisation — it is no longer safe to deal with excessive cash and tax evaded money ... It is absolutely clear that those who have been indulging in all these are no longer safe,” Jaitley said.

Post-demonetisation, there had been a hike in collection of personal income tax, the finance minister said, adding that the new portal would help honest taxpayers.

Central Board of Direct Taxes (CBDT) chairman Sushil Chandra said there was 17 per cent growth in gross collection, which was Rs 1.46 lakh crore more than last year’s.

There was 22 per cent growth in e-filed returns after demonetisation, he said. Total returns filed up to March were 52.8 million, and out of that 98 per cent were e-filed returns.

The number of PAN allotment increased from 100,000 to 200,000 a day, and the tax department had allotted more than 300 million PANs to various persons, he said.

The Operation Clean Money was initiated by the Income Tax department on January 31 with the launch of e-verification of large cash deposits made during November 9-December 30, 2016, when people were allowed to deposit cash in demonetised currency in banks.

In the first phase, around 1.8 million people were identified in whose case, cash transactions did not appear in line with the taxpayer’s profile.

More than 972,000 taxpayers submitted their response without visiting Income tax office till May 12.

These taxpayers have provided response for 1.3 million accounts involving cash deposits of around Rs 2.89 lakh crore. Online responses have been assessed and no further action will be taken in cases of satisfactory explanation, said an official statement.

Furthermore, the department has also identified 371,000 new accounts relating to 158,000 taxpayers who made partial declaration of accounts and amounts in responses under phase-1 of Operation Clean Money.

Chandra said between November 2016 and March 2017, search actions were conducted on 900 groups which revealed undisclosed income of Rs 16,398 crore. Assets seized were to the tune of Rs 900 crore of which Rs 636 crore was in cash.

Surveys were conducted in 8,239 cases which led to detection of undisclosed income of Rs 6,746 crore.

The department referred more than 400 cases to the Enforcement Directorate and the CBI that registered various cases. While the ED has arrested 18 persons, the CBI arrested 38 persons.

"We want to convey a message that if you are doing something wrong, there is not only one department, other departments will also take action simultaneously. And, you cannot escape from it. So, that fear should be in the mind of the assessee if they are doing something wrong. There should be no fear in the mind of honest taxpayer," Chandra said.

In the phase-2 of Operation Clean Money, the department will handle the high risk cases by selecting appropriate enforcement action (verification, search, survey, scrutiny).
In this phase, more than 6,000 transactions of high value property purchase and 6,600 cases of outward remittances will be subjected to detailed investigations under the operation. All the cases where no response is received will also be subjected to detailed enquiries.

In this phase, too, the department will contact assessees through emails, SMS etc. The department has already identified 568,000 new cases, in addition to 1.8 million cases under the phase-1 of Operation Clean Money.

In case of jewellers, petrol pump owners, traders, property purchasers, investigation findings will be shared.

The new portal provides comprehensive information at one place consisting of step by step guides, frequently asked questions, user guides, quick reference guides and training toolkits related to verification process and other issues.

The portal will give details of high-risk areas like petrol pumps and jewellers to help increase awareness about tax compliance. A taxpayer can also go to the website and take a pledge of paying taxes and this will aid in ensuring voluntary compliance, Chandra said.

The income tax department has engaged two specialised data analytics agencies and a business process management agency to augment departmental capability in analysing large volumes of cash deposit data, track the compliance status of taxpayers and reporting entities.

Chandra said a data analytics firm and the tax department made profiles of people depositing cash post note ban and graded the various cases under Operation Clean Money in three categories of ‘high risk’, ‘medium risk’ and ‘low and very low risk’.

There are 100,000 persons under the high risk bracket wherein the department has initiated enforcement action through verification, search, survey and scrutiny.

For 754,000 persons in the the medium risk category, the tax department has started targeted campaign communicating with the assessee and explaining the findings in specific cases so that similarly placed persons can forsee the consequences.

For 595,000 persons in low risk and 341,000 persons in very low risk category, the department will monitor tax compliance in due course.(Business Standard)

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