Former Central Board of Direct Taxes chairperson Sudhir Chandra, who headed a high-level committee to tackle the black money menace back in 2011, has said that the Income Tax department will find it challenging to scrutinise all cash deposits in bank accounts, following the demonetisation of high-value currency notes.
“We have around 45 crore bank accounts and if one per cent of such accounts are picked up for scrutiny, that itself will make 45 lakh cases. Is it humanly possible? No chance,” Mr. Chandra said. Even if each of the 4,000-5,000 officers in the IT department handled 100 cases each, such scrutinies could take a long time to complete.
As per the existing Income Tax Act of 1961, there is a two-year time limit set for assessing officers to complete a taxpayer’s assessment once her or his case is picked up for scrutiny, Mr. Chandra said.
“It has to be concluded within two years. How will that take place? So the department will have to be very, very selective. One per cent of bank accounts doesn’t seem viable, so maybe 0.001 per cent [should be checked],” he said.
‘Bar too low’
The former CBDT chief also said the government’s statement that cash deposits of up to Rs. 2.5 lakh into banks might not attract scrutiny from the tax authorities set the bar too low.
The former Chairperson of the Central Board of Direct Taxes (CBDT) Sudhir Chandra, who headed a high-level committee to tackle black money in 2011, has said that the past month, he had come across several families with apprehensions about the after-effects of demonetisation of the high-value currency notes.
Saving in gold
“Many families, after they were blessed with a daughter, started saving money and buying 10-20 grams of gold every year, and now they have over 500 grams of gold. So there are many apprehensions,” Mr. Chandra said, speaking at the launch here of a book The Black, White & Grey: Re-coloring the Rupiah, written by Pragun Akhil Jindal.
In the case of an Income Tax search or raid, the government had recently clarified that gold holdings up to 500 grams each in the case of married women, 250 grams each in the case of unmarried women and 100 grams per male wouldn’t be seized.
Elderly pay in cash
The former Chairperson of the CBDT said: “Those who are above the age of 50 don’t have the propensity to pay by cards; they normally pay by cash even for restaurant bills, and their withdrawals from banks would be sumptuous amounts. Ladies and senior citizens are very apprehensive about what would happen to their life savings… if it is more than Rs. 2.5 lakh.”
