New Delhi: As people across the country queue up to exchange notes of Rs 500 and Rs 1,000, the income tax department has turned the heat on individuals, small companies and NGOs run by tax-exempted trusts, as per reported by TOI.
The department has been issuing notices to individuals and companies that deposited Rs 2.5 lakh or more, asking them to show the source as well as I-T returns for at least two years.
As for NGOs, the I-T department has asked them to show their cash balance as on March 31, 2016, and on November 8 when Prime Minister Modi announced the demonetisation.
“In the wake of demonetisation of Rs 1,000 and Rs 500, the I-T department is examining the source of cash deposits with banks. We have information that your company has deposited between November 8 and November 12 more than Rs 4.5 lakh in cash,” said a notice sent to a company.
The company deposited old notes twice since November 8 and the bank sent the information to RBI as well as the income tax department.
“We get information on accounts which got deposits over Rs 2.5 lakh in cash. Once we get the information, we check the company’s or individual’s I-T returns and send a notice asking them for documents, bills, vouchers and other papers to validate the source of cash,” a senior I-T official told TOI on condition of anonymity.
Notices have also been sent to all NGOs seeking details on cash balance.
“We got notices from the I-T department a few weeks after the Union home ministry cancelled the Foreign Contribution (Regulation) Act 2010 (FCRA) registration or asked for more documents. This follows information that many people are using NGOs to launder black money,” Voluntary Action Network India (Vani) chief executive officer Harsh Jaitli told TOI.
The senior I-T official said, “We will get details of the cash balance on hand between March 31 and November 8. We will also look at deposits in cash after November 8. If the cash on hand and what has been deposited do not tally, then the NGO is in trouble”.
Meanwhile, Vani, in an advisory, said, “We would like to advice all members, associates and friends not to accept heavy donation or unaccounted cash transaction. Some people are offering lucrative incentives to launder their black money through charitable institutions”.
“We have received information that CBDT is monitoring bank transactions of charitable and religious institutions and might ask for details during the current financial year,” Jaitli said.