Mumbai, July 14, 2017

This is in addition to 60,000 identified under Operation Clean Money 2.0

The income tax (I-T) department has identified 556,000 people for scrutiny over “huge inconsistencies” in the cash deposits made during the demonetisation period. This is the new addition to the tax data that had identified 60,000 people for investigation into claims of excessive cash sales under the department’s Operation Clean Money phase-II.

“The identified people’s bank accounts saw a sudden surge of cash deposits, which raised a red flag in the system,” said a senior tax official.

The cash flow, the official said, was not limited to these people’s bank accounts but was also seen in various investments.

Sources said the new data had been gathered from specified financial transactions (SFD) like banks, mutual funds, insurance companies. Tax authorities have started issuing notices to the people concerned, seeking explanation on being inconsistent in cash deposits.

Besides, 104,000 of 946,000 respondents have been caught for making partial disclosure of bank account details, after a query was raised by the department in this regard. According to tax officials, these are the people who hold multiple bank accounts but made disclosures about only one or two.

“30-40 per cent of identified people would go in the category of, or can be described as, high-risk persons,” said the official cited above.

Sources said the Central Board of Direct Taxes (CBDT) had recently appointed two top data analytics firms to make utmost use of information coming from different sources. This includes integration of data sources, relationship clustering and fund tracking.

In the second phase of exercise, more than 6,000 transactions of high-value property purchase and 6,600 cases of outward remittances were also identified, which were subjected to detailed investigations.

The threshold under the first phase of the operation, which began on January 31 and ended on February 15, was kept at deposits of Rs 5 lakh and above, while the second phase was launched in April and targets deposits over Rs 10 lakh.

The first phase of Operation Clean Money involved e-verification of cash deposits made in the banks. The entire phase was conducted online, and 1,792,000 people were identified whose deposits were not matched with their tax profile.

[The Business Standard]