CBDT relaxes norms for verification of cash deposits post note ban

Tribune News Service

New Delhi, February 22

As part of the ongoing drive to flush out cash deposits made during the demonetisation period, the I-T Department will not carry out any further verification for cash deposits up to Rs 2.5 lakh for individuals not having any business income and up to Rs 5 lakh made by senior citizens above 70 years of age.

As per guidelines issued by the CBDT, the source of such amount can be either household savings, savings from past income or amounts claimed to have been received from other sources.

As per CBDT guidelines, the response filed by the person under verification will be appraised under available information. In case explanation of source of cash is found justified, the verification will be closed by the assessing officer electronically without any physical interface with the person concerned.

In case of persons engaged in business or requirement to maintain books of account, no additional information is required to be submitted by the person under verification if the total cash out of income or savings is not more than the closing cash balance as on March 31, 2016 in the return for AY 2016-17.

However, if the assessing officer has reason to believe that the closing cash balance has been increased by revising the return or backdating transactions in the books of account, further verification may be carried out, the CBDT procedure said.

Analysts say that the Income tax exercise will lead to higher revenue, India's FY2018 taxation revenue may get an indirect boost from demonetisation, according to a report by Kotak Institutional Equities.

The report said it is possible that some of the accounts identified by the I-T department voluntarily disclose their undisclosed income under the government's ongoing Pradhan Mantri Garib Kalyan Yojana (PMGKY) scheme, which gets over on March 31 and pay the requisite tax and penalty.