Due Diligence. Verify your cash deposits online

Deposited old currency notes in the bank after the demonetisation announcement? Under the recently launched ‘Operation Clean Money’, the tax department is reaching out to about 18 lakh persons whose cash deposited during November 9-December 30, 2016 is, according to them, not in line with the taxpayer’s profile. Be informed on what this is all about,for you may be among those whose activities the government is interested in knowing more about.

Since the last two weeks, email and SMS communications are being sent to some assessees asking them to do an ‘online verification’ of the cash deposits made by them, post the demonetisation of higher value currency notes. This verification is to be done in the e-filing portal of the IT department — www.incometaxindiaefiling.gov.in , where the data will be displayed against the assessee’s PAN, once they log into their e-filing account.

The verification is to be done within ten days of the receipt of communication, to avoid receiving notice or any other enforcement action from the department’s side. While fresh in the wake of demonetisation it was said that deposits over ₹2.5 lakh (which don’t match with your income) would be scrutinised, the department, in its latest move, has not spelt out any minimum amount.

Since IT return filing has predominantly moved to the online mode in the last few years, most assessees are bound to have a user id and password in the e-filing portal. Even if you are filing your return through an e-intermediary or using the services of a chartered accountant or a tax return preparer, your login credentials will be available with them.

Hence, it is best you log into your e-filing account and look out for any flags raised by the department, irrespective of whether you have received any email or SMS from them till date. This is because, in case your account has an old phone number or outdated email id, chances are that communication would not have reached you, although a deposit made by you might have come under the radar.

If for some reason, you haven’t registered on the e-filing portal yet, you have to register afresh and then log into your account. If you are among the assesses which the department has zeroed in on, the ‘Cash Transactions 2016’ link under the ‘Compliance’ section shows details of cash deposits that they think is out of sync with your income.

If you feel that the deposit details is not that which has been made by you and has been wrongly linked to your PAN, you have to option to intimate it then and there and also modify the deposit amount.

Else, if the information displayed is correct, the explanation for the source of the cash deposit — as to whether it is out of earlier income/ savings or out of receipts exempt from tax, whether it is received from identifiable/unidentifiable persons or whether is disclosed/to be disclosed under the PM Garib Kalyan Yojana Scheme (PMGKY), etc. — is to be given. Further information under each of these heads disclosed is also sought.

A user guide is available on the e-filing portal to help you complete this verification procedure. In case you have any further doubts or need clarifications, you can write to cash2016@incometaxindia.gov.in or call the help desk at 1800 4250 0025.Don’t forget to verify and update your email address and mobile number on the portal, lest you miss out on any future communication from the authorities.

One good thing about this operation is that it is entirely online. The department calls it a non-intrusive system of e-verification, where there is no need to visit any IT office and where there is no human interface involved. The idea is to encourage tax payers to give out information without the fear of harassment from the officers. But, at the same time, you cannot probably consider the matter closed once you submit your responses. The department wants assessees to keep in mind that the information is dynamic and will be updated on receipt of new information, your response and data analytics. This implies that you may continue to be on their watchlist.

Besides, the department has also made it clear this is only the first phase and the process will cover more assesses in future. So, even if you nothing shows up in the ‘Cash Transactions 2016’ link on the portal now, you may not be spared. So if you know that the source of your cash deposit can’t be explained, it is a good idea to disclose it under the PMGKY. The scheme is open until March 31.

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