The tracking of high-value bank transactions has helped the revenue department unearth undisclosed income in small towns such as Junagarh in Gujarat, Katni in Madhya Pradesh and Guntur in Andhra Pradesh.
Banks have to keep track of such transactions and submit monthly reports to the revenue department following a 2005 decision by the government to levy a tax on these.
The banking cash transaction tax (BCTT) of 0.1% is levied on daily cash withdrawals exceeding Rs25,000 in the case of an individual and Rs1 lakh for other entities, from any banking account other than a savings one.
The purpose of the tax and the tracking was to discover undisclosed income or black money. The revenue department initially drew blood in Delhi where its raids over the past two years unearthed Rs3,600 crore in undisclosed income as previously reported by Mint. Now, the department has extended its reach to other cities and towns, including Bangalore, Pune, Hyderabad, Kolkata and Mumbai and already discovered undisclosed income of around Rs500 crore.
The department has collected Rs504 crore as BCTT until 20 March. Last year, it had netted Rs383.99 crore.
Shyamal Mukherjee, executive director at audit firm PricewaterhouseCoopers, said that although BCTT has helped the tax department obtain information from banks, its utility would decline in the coming years as the department begins to use technology to link its various sections.
Among the cases cracked by the department is one in Junagarh, where an individual was found to be making cash withdrawals and writing off the money in bogus expenses. He was found to have concealed Rs50 lakh in 2006-07. A similar case in Ahmedabad resulted in a find of Rs3 crore.
In Mumbai and Pune, the tax department has thus far detected undisclosed income of around Rs130 crore and Rs175 crore, respectively. In Mumbai, the cases have actually led to several hawala—illegal foreign currency—transactions being unearthed. The beneficiary of one such transaction had made bogus purchases of Rs8.53 crore and recorded bogus sales of Rs8.01 crore. The department also found an individual in Mumbai who provided Rs40 crore of fake bills to others.