Income tax returns to carry tough questions on large cash deposits

Those who made large cash deposits will be given a list of options to select from in their online tax return filing account by the tax department about the source of their income

Remya Nair

Depositors will have to explain each of the big cash deposits in their different bank accounts.

 Tough income tax scrutiny of people who made large cash deposits in their bank accounts between 9 November and 31 December is on the anvil, as the government seeks to sift through voluminous demonetisation-related data to catch tax evaders looking to legalise illegal income.

Those who made large cash deposits will be given a list of options to select from in their online tax return filing account by the tax department about the source of their income. This will have to be explained for each of the big cash deposits in their different bank accounts. Depending on their replies, the online return system has been designed to come up with a list of follow-up options.

Here’s the list.

• Cash deposit is out of earlier income or savings (The depositor will have to provide details of the same).

• Cash is out of receipts exempt from tax (For instance, if cash deposited is on account of agricultural income, you will have to provide details of the same. If the cash is received as donation, you will have to provide details of the person from whom the donation has been received).

• Cash is withdrawn out of bank account (The depositor will have to give details about the bank account from which money was withdrawn, including the name of bank, IFSC code, account number and amount withdrawn).

• Cash received from “identifiable” persons with Permanent Account Number, or PAN (The depositor will have to clarify the nature of the transaction and provide PAN).

• Cash received from identifiable persons without PAN (The depositor will have to clarify the nature of the transaction and provide the complete address of the person from whom cash was received).

• Cash received from un-identifiable persons (The depositor will have to provide the nature of the transaction like cash sales).

• Cash disclosed/to be disclosed under PMGKY (Pradhan Mantri Garib Kalyan Yojana)

Source : livemint