The number of people who have given their responses under the government’s ‘Operation Clean Money’ has reached 8.38 lakh as of Mar 9, slightly less than half the 17.92 lakh people to whom questions have been sent.
The questions were sent in late January and early February, and were supposed to have been replied to last month.
The 17.92 lakh people were identified in January in the first step towards examiniing whether or not taxes had been paid on all the money deposited in banks during the demonetization drive.
In November last year, the government cancelled the validity of old currency notes and asked everyone to submit their cash holdings to banks.
Over 1 cr (10 mln) accounts saw cash deposits in excess of Rs 2 lakh, out of which 18 lakh saw cash deposits in excess of Rs 5 lakh. The first phase of verification involves people who deposited over Rs 5 lakh in cash into their accounts.
Money that had been concealed and on which taxes had not been paid can be declared under a special scheme launched in December, known as Pradhan Mantri Garib Kalyan Yojana. The Yojana is open till the end of this month, but has not seen many takers so far.
Out of the nearly Rs 15,00,000 cr of money deposited during the demonetization drive, only Rs 2,500 cr, or about 0.17%, has been declared under the scheme.
Any money declared under the scheme will attract a tax of 50%, and out of the remaining 50%, half has to be deposited a special interest-free deposit for four years, taking the total cost of compliance to about 59% of total amount declared.
LAST CHANCE
Those who have not responded to the Income Tax Department’s notices — which are sent via email and SMS — include many who have not logged in even once into the department’s tax filing portal.
In February, the department said that out of the total 17.92 lakh people who were identified as having made extraordinarily large cash deposits, 4.84 lakh did not have an account on the efiling portal.
In addition to these people, there may be many who have ignored to notices. The notice has to be responded to using the portal, and an appropriate expalantion has to be given for the source of the cash.
In case explanation of source of cash is found justified, the verification is closed.
If not, the verification moves on to the next stage involving a scrutiny of the person’s financial and other records.
However till March 31, the person can also end the verfication process by declaring the amount deposited in his or her account under the Pradhan Mantri Garib Kalyan Yojna and paying the penalties under the scheme.