New Delhi: Any bank account suspected to have been “misused” for money laundering or shell company operations won’t be exempted from probe under ‘Operation Clean Money’ despite having low deposits, the Central Board of Direct Taxes (CBDT) said on Tuesday.
CBDT, the policy- making making body of the department, issued specific guidelines to ascertain if a particular cash deposit is genuine or not and with a view to “maintain consistent approach during verification” under ‘Operation Clean Money’ where 18 lakh people were contacted by the taxman.
“In case, there is information or apprehension/suspicion that a particular bank account(s) has been misused for money laundering, tax evasion, entry operations in shell companies, the monetary cut-off or cash balance based cut off prescribed in clauses above requiring no-verification, shall not be applicable,” it said.
The instructions earlier made it clear that in case of an individual (other than minors) not having any business income, “no further verification is required to be made of total cash deposit is up to Rs2.5 lakh”. “Amounts above this cut-off may require verification to ascertain whether the same is explained or not,” it said. In case of people engaged in business or those required to maintain books of accounts, the CBDT instructions said, “No additional information is required to be submitted by the person under verification if total cash out of earlier income or saving is not more than the closing cash balance as on 31 March 2016 in the return for assessment year 2016-17.”
However, if any discrepancy in these records is found “further verification may be carried out” and such a procedure should also be followed for cash deposits claimed to be made out of receipts exempt from tax, like agricultural income, it said.
In case where the taxman suspects a cash amount that is withdrawn from a bank account, then instructions advised that the “Assessing Officer (AO) should take a balanced view in analysing the time gap from the point of view of normal human behaviour and specific circumstances of the case” keeping in mind the date of demonetisation, i.e., 8 November 2016.
A special relief has been ensured to those who were declarants under one-time domestic black money window that ended late last year. “If the person under verification has claimed that the cash deposit has been disclosed in Income Declaration Scheme (IDS), 2016 and if the same is found to be correct, no further verification should be made,” it said.
Verification under the said exercise will be kept “pending” for those who inform the taxman that they will disclose their black money under the Pradhan Mantri Gramin Kalyan Yojna (PMGKY) that ends on 31 March. “The verification should be closed on the basis of evidence of disclosure made under PMGKY,” it said.