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Don’t forget to disclose cash deposit in income tax return

Information on cash deposited in bank accounts from 09.11.2016 to 30.12.2016 to be disclosed income tax return for the Assessment Year 2017- 2018

Income tax department has started sending email communication for those who have already submitted the online response to the notice received for cash deposit made during the demonstration period, requesting them to disclose the same in income tax return.

Further, The Income Tax Department (ITD) has used information received under the Statement of Financial Transactions (SFT) to identify 5.56 lakh new persons in the second phase of “Operation Clean Money” (OCM) and send them email communication. (ITD) intends to leverage technology and data analytics for effective utilization of demonetization data i.e. transactions related to cash deposits during 9th Nov to 30th Dec 2016. Therefore online verification has been enabled on e-filing portal (for taxpayers) which will be synchronized with the internal verification portal of ITD. Email and SMS are being sent to the taxpayers informing that information has been received in the case and response may be submitted on the e-filing portal

One such email communication is reproduced below.

Information on Cash Transactions identified in the 2nd phase of Operation Clean Money – ADXXXXXXXQ

Dear XXXXXXX,

Income-tax Department (ITD) has identified X accounts showing total cash deposits of Rs. xxxxxxx relating to you in the 2nd phase of Operation Clean Money.

ITD has enabled online verification of the cash transactions and there is no need to visit Income tax office for submission of response. The information in respect of these cases has been made available in the e-filing portal. Please submit your response by following the below steps.

Step 1: Login to e-filing portal at www.incometaxindiaefiling.gov.in
Step 2: Click on “Cash Transactions, 2016″ link under “Compliance” section.
Step 3: The details of transactions related to cash deposits during 9th Nov to 30th Dec 2016 will be displayed
Step 4: Submit your online response for each transaction.

  • For “Quick Reference Guide for Online Verification of Cash Deposits” click here.
  • For detailed “User Guide on Online Verification of Cash Deposits” click here.
  • Visit https://cleanmoney.gov.in/ for latest updates on Operation Clean Money.

Kindly submit your response within 10 days of this email.

Note:

  • Details of cash deposited in bank accounts aggregating to 2 lakh or more is required to be given in the Income Tax Return (ITR).
  • This information will be matched with the information in possession of the Income tax Department.
  • The taxpayer should ensure that ITR is compliant with amount deposited in bank accounts during the period of demonetization and while computing income, the amounts so deposited are considered/ taken into account while paying taxes.
  • Cash deposits made in the above period may thus be fully and truly disclosed in the income tax return (ITR).

In cases where the response is not received from taxpayers within the reasonable time, other proceedings and enforcement actions shall be considered by the department.

For detailed procedure on E-Verification of cash deposit, you can visit https://www.cleanmoney.gov.in/?q=content/how-e-verify

cash depost

In this connection department issued Press Note dated 14-07-2017 which is reproduced below.

Government of India

Ministry of Finance Department of Revenue

Central Board of Direct Taxes

New Delhi, 14th July, 2017.

PRESS RELEASE

Income Tax Department Pushes Additional cases of High Cash Deposits in Second Phase of Operation Clean Money

The Income Tax Department (ITD) has used information received under the Statement of Financial Transactions (SFT) to identify 5.56 lakh new persons in the second phase of “Operation Clean Money” (OCM). These are persons whose tax profiles were found to be inconsistent with the cash deposits made by them during the demonetization period. Another 1.04 lakh persons who did not disclose all bank accounts during e-verification in the first phase of OCM have also been identified. In the first phase, 17.92 Lakh persons had been identified for e-verification of large cash deposits, of which 9.72 Lakh people had submitted online response.

The information in respect of the cases and accounts identified has been made available in the e-filing window of the PAN holder at the portal https://incometaxindiaefiling.gov.in. The PAN holder can view the information using the link “Cash Transactions 2016” under “Compliance” section of the portal. The taxpayer will be able to submit online explanation without any need to visit Income Tax office. All identified persons are being informed through Email and SMS for submitting response online

The following information has been communicated to promote voluntary compliance: Details of cash deposited in bank accounts aggregating to 2 lakh or more is required to be given in the Income Tax Return (ITR). This information will be matched with the information in

  • Details of cash deposited in bank accounts aggregating to 2 lakh or more is required to be given in the Income Tax Return (ITR). This information will be matched with the information in possession of the Income tax Department.
  • The taxpayer should ensure that ITR is compliant with amount deposited in bank accounts during the period of demonetization and while computing income, the amounts so deposited are considered/ taken into account while paying taxes.
  • Cash deposits made in the above period may thus be fully and truly disclosed in the ITR.

The Portal of Operation Clean Money (https://www.cleanmoney.gov.in) launched on 16th May 2017 has the following features:

  • Providing comprehensive information at one place consisting of Step by Step Guides, Frequently asked Questions, User Guides, Quick Reference Guides and Training Toolkits related to verification process and other issues.
  • Enabling Citizen Engagement for creating a tax compliant society where every Indian takes pride in paying taxes. Citizens would be able to support the operation clean money by taking pledge (इमानदारी का उत्सव), contribute by engaging and educating fellow citizens (जन भागीदारी), and share their experiences and provide feedback (सुखद अनुभव).
  • Enabling Transparent Tax Administration by sharing status reports (including sanitized cases and explanation of verification issues) and thematic analysis reports (e.g. taxpayer segment analysis of cash deposit data).

(Meenakshi J Goswami)

Commissioner of Income Tax

(Media and Technical Policy)

Official Spokesperson, CBDT

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