Home / Money / Calculators /  Operation Clean Money: everybody needs to check their e-filing account

If you had deposited a large stash of cash post-demonetization, chances are that you have already got a message from the income tax department. You need to respond within 10 days of getting the message. But even if you have not received any message and did not deposit much money, do check your e-filing account to see if there is bad news ahead for you. 

You could get a compliance notice if your high-value transactions are not in line with your income profile. You could also get a notice because of technical errors, where a cash deposit was wrongly attributed to your Permanent Account Number (PAN). This means that every taxpayer needs to login and check if there is any message from the tax department.

Login into your e-filing account on the income tax department website https://incometaxindiaefiling.gov.in. Your username is your PAN number, and keep your password handy. Click the “Cash Transactions, 2016" option from the drop down list under “Compliance" section. If there is no cash deposit-related compliance against your profile, it will show the message: “Presently, you are not required to submit any response. You may check again later. Please ensure that your email and mobile is updated in the profile." However, if you did make deposits that are out of tune with your past returns, it will reflect the details of transactions related to cash deposits between 9 November and 30 December 2016. In such a case, you will be further required to submit responses, which can be done online. 

The response can be submitted in two steps. The first step is to acknowledge whether the transaction information belongs to you or not. For each transaction, you can choose: “The account relates to this PAN" or “The account does not relate to this PAN".

“There are possibilities that cash deposit transactions were wrongly credited against your PAN," said Sudhir Kaushik, co-founder and chief financial officer, Taxspanner.com, an e-filing and tax services portal. “In the past there have been instances where tax deducted at source (TDS) was wrongly credited against another PAN; such mistakes could happen in these cases too. But probability is very low," he added.

So, if the transaction information does not belong to you, you can select the option: “The Account does not relate to this PAN." Upon doing so, the message will read: “Your feedback will be sent to the information source for confirmation". But if the transaction information belongs to you, you should select the option: “The account relates to this PAN." After that you will be directed to the next step where you can respond about the details of the transaction. 

First, you need to confirm that the amount mentioned in the transaction or deposit is correct. If there is a mismatch in what you deposited and the amount against which the department is seeking your response, you can mention the correct amount you had deposited in the bank account. 

Once you confirm the amount of money deposited by you in the bank account, the next step is to give details about the deposited amount. “One must take utmost care while responding about the source of deposited money," said Amit Maheshwari, partner, Ashok Maheshwary & Associates LLP. Based on the information provided by the individual, the department will take further necessary action. If the deposited amount in the bank is from more than one categories (or out of cash in hand), the details of each source and amount from it needs to be mentioned.

If you claim that the deposited cash was out of earlier income or savings, you may need to provide additional information, which will be matched with your income tax returns filed earlier. If this is not in line with the taxpayer’s profile or other available information, the case may be selected for verification based on the risk criteria.

If cash is claimed to be out of receipts exempt from tax, such as agricultural income, gift, and donation, further details need to be provided such as name and PAN of the person who gifted or donated. In the other three options you can mention that the cash deposited is received from another person. Here you have to give a break-up of the: “Cash received from identifiable persons (with PAN)", “Cash received from identifiable persons (without PAN)", and “Cash received from un-identifiable persons". 

But if someone mentions the source of the cash as received from another person—whether identifiable or not—it may attract trouble. This is because the income tax department has warned people against depositing others’ money in their own account. “It may attract implications of the benami property Act," said Maheshwari. “Under the Act, both penalty and prosecution can be initiated against such persons," he added. While filing the responses, remember that the sum of all sources of cash deposits should match the total cash deposited amount. Besides that, you can also mention that the deposited money is disclosed or is to be disclosed under Pradhan Mantri Garib Kalyan Yojana.

Even if you have not received any such email or message, “one should proactively login to the e-filing account and check if there is any compliance intimation to be addressed," advised Kaushik. “We are also advising some of our clients according to their profile, to visit and check their e-filing accounts," said Maheshwari.

So, go ahead and check the status even if you made no big deposits.

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