The tax department has now asked banks and post offices to provide details of cash deposits made from April 1, 2016 till November 8, when the demonetisation of high-value currency notes was announced, in cases where deposits of ₹500 and ₹1,000 notes exceeded specified limits after November 8.
Bank account holders, who have not yet submitted their PAN or Form 60 to their respective banks, have been asked to so by February 28, 2017, failing which no withdrawals will be allowed from such accounts having a ‘substantial credit balance,’ as per an earlier decision by the Reserve Bank of India.
Rules amended
“Income-tax Rules have been amended to provide that banks shall obtain and link PAN or Form No 60, where PAN is not available, in all existing bank accounts (other than basic savings bank deposit accounts) by 28 02.2017, if not already done,” the notification issued on January 6 by the the I-T Department said.
“The banks and post offices have been mandated to submit information in respect of cash deposits from April 1, 2016 to November 8, 2016 in accounts where the cash deposits during the period November 9, 2016 to December 30, 2016 exceeds the specified limits.”
Following the decision to scrap the legal tender nature of old high-value currency on November 8, the tax department had sought details of deposits above ₹2.5 lakh in savings accounts, more than ₹12.50 lakh for current accounts and exceeding ₹50,000 in a single day up to December 30, the last day to deposit old notes in banks and post offices.
The central bank, on December 15, 2016, had mandated that no withdrawal shall be allowed from the accounts having substantial credit balance or deposits if PAN or Form No. 60 was not provided.
While the Centre had initially said that deposits up to ₹2.5 lakh in the November 9-December 30 window to deposit old ₹500 and ₹1,000 bank notes, may not be scrutinised by the tax authorities, it had later clarified that any amount of deposits could be looked into.
Closer scrutiny
Since it had come to the Centre’s notice that people were paying impoverished account holders to deposit large sums of cash into their accounts so as to convert it into white money, Economic Affairs Secretary Shaktikanta Das had said in November that the tax department would scrutinise all deposits.
“From this move, the government could potentially have a huge amount of data on bank transactions that can further be analysed to ascertain trends in bank transactions,” said Rishi Shah, economist at Deloitte. “Analytics on the data can prove to be valuable.”
