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I-T Department to Verify Large Deposits Post-Demonetisation

The IT Department has identified the bank branches where the inflow of Jan Dhan deposits have been more than normal.

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With the vast data on post-demonetisation deposits before it, the Income Tax Department has said it is already on the job of verifying the account details and notices will soon be sent to those identified with irregularities.

That process (verification) is on for quite some time. It’s going on. Our directorate of investigation and intelligence does that. They are on the job. Notices may start soon to such accounts. If there are large number of other accounts with huge deposits, then maybe we will go into those first.
Top Official to IANS

He added that the department will have to prioritise and plan the action considering the constraints of a limited manpower.

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It is a huge operation, launched by our investigation wing. All the information would be very large, so very relevant information will have to be culled out and we’ll have to prioritise.

The Income Tax Department has also identified the local clusters and bank branches where the inflow of Jan Dhan deposits have been more than normal, in order to investigate money deposits in Jan Dhan accounts which belonged to somebody else, but the scrutiny into these may take longer.

Deposits in Jan Dhan accounts have grown by more than 50 percent since the demonetisation announcement on 8 November.

"That depends on the total workload," the official said on the scrutiny of such Jan Dhan accounts.

Whatever manpower we have, we’ll have to use it in the best possible way. There has to be some prioritising of action and see the way in which we can have maximum impact. The action will be planned out properly.

The department is facing shortages of manpower and infrastructure. At the all-India level, 396 posts are vacant against the sanctioned 2,200 at the level of Assistant and Deputy Commissioners, which is a crucial category for working on the assessment exercise.

About 30-35 percent posts are vacant in the category if the posts of Joint and Additional Commissioner are also included. The vacancy at the staff level is even worse - around 40 percent.

However, the department does expect increased revenues post demonetisation, to which the government's recently launched Pradhan Mantri Garib Kalyan Yojana is also likely to add.

Response from the ongoing scheme -- Pradhan Mantri Garib Kalyan Yojana -- may be coming. Let’s see how it plays out. Indications are that there will be increase in revenue collections, though I can’t say how much.

The Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016, commenced on 17 December 2016, and is open for declarations up to 31 March 2017.

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According to the scheme, the person will have to pay 30 percent tax on income, 33 percent surcharge on tax, 10 percent penalty on income, totalling nearly 50 percent of the income to be declared under the scheme. In addition, an amount equal to 25 percent of the declaration will have to be deposited in the scheme for four years without any interest.

The total amount of high denomination currency circulating in the system on 8 November was Rs 15.44 lakh crore or $225 billion (Rs 8.58 lakh crore in Rs 500 notes and Rs 6.86 lakh crore in Rs 1,000).

According to estimates, banks have collected cash deposits of over Rs 14.9 lakh crore following Prime Minister Narendra Modi's 8 November announcement.

(Meghna Mittal can be reached at meghna.m@ians.in. This piece has been published in an association with IANS.)

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