Centre gets £600 mn tax on stashed cash after note ban

Wednesday 22nd March 2017 05:57 EDT
 
 

Justice Arijit Pasayat, vice-chairman of the special investigation team on black money, has said that since the demonetisation, the Centre has collected somewhere around £600 million as tax on unexplained cash deposits so far. He added that the amount is set to go up. Tax authorities have sought explanation from people who deposited substantial amounts of cash, after Rs 500 and Rs 1000 notes were banned, either in their own account or in the name of others.

Many of them agreed to avail the amnesty scheme which earlier allowed compounding by payment of 60 per cent of the deposits as tax, now raised to 75 per cent. Pasayat, along with SIT chairman Justice MB Shah supervises the drive against black money by the CBI, Enforcement Directorate, Central Board of Direct Taxes and other agencies. He refused to hazard an estimate of tax that would be collected from the unexplained cash deposits as a fallout of demonetisation, but was confident that the amount would be solid. He said that in the first phase of the post-demonetisation drive against black money, focus was on cash deposits of Rs 5000,000 or more. E-mails and SMSes have also been sent to all such depositors. Many chose to avail the amnesty schemes for compounding by paying up the stipulated steep tax.

Pasayat cited that in a state like Odisha, which is generally considered poor, there were thousands who responded to such e-mails and SMSes. "As many as 1,092 people, who had deposited over Rs 5000,000, have not yet responded to notices," he said. "The authorities, while explaining the huge bank deposits, will finally have to come down to the macro level at some point of time to examine sudden huge deposits of cash in even Jan Dhan accounts. The exercise will be tedious and time consuming. But the tax authorities are determined to undertake this workload."

Those who have made huge deposits, have been asked to submit balance sheets of last three years along with income tax declarations for every year. "The onus is on those who have deposited huge cash to explain the source," the VC said. Authorities have been particularly asked to be very strict with government officials who have deposited large amounts as the entire unexplained money deposited by them would be confiscated given the applicability of Prevention of Corruption Act. "A divisional forest officer in Odisha has deposited £250,000 in cash. How could he explain the source? It has to be confiscated as it could be nothing except a bribe," he said.


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