The revenue department, while scrutinizing data on deposits of demonetized currencies has issued notices to about 10000 people under the benami law seeking sources of their income, as reported by The Economic Times.
Sources in the department confirmed that many other may get similar notices in the coming week. “While the money may have come into the banking system, the money has come with a name,” said a senior official close to the development. “Not just income tax but several government departments can now use the data for future investigations.”
Experts have reportedly stated that the Income Tax department is focusing on larger transactions as of now and the people who have evaded tax could be in trouble.
The department has been utilizing data analytics including phone numbers, credit card and PAN details, tax returns and even data available on social media platforms to detect tax evasion.
The benami notices are preliminary and have been issued to those who had deposited unaccounted cash or whose cash deposits may not correspond with their income or in many cases not belonging to them. The report also mentioned that the notices would mean both the bank account holder and the one who deposited the amount would face benami investigations.
Experts maintained that demonetization has brought several suspicious transactions under the tax department’s scrutiny through ‘cross-referencing’ with older data. They furthered that the government is using advanced tools to analyze and establish relationships among different entities up to 16 levels deep, based on different details such as addresses, phone calls, social media interactions, travel trends and IT returns.
The Modi government, since the time, has come to power, undeterred to fight corruption and tax evasion has tightened the noose around tax dodgers.
The November 8, 2016 decision to scrap banknotes of Rs 500- and Rs 1,000 denomination was aimed at cornering black-money hoarders into depositing or exchanging old notes at banks.
Under ‘operation clean money’, which was launched on January 31 2018, to detect shady funds deposited with banks, more than 60,000 persons, including 1,300 high-risk persons, according to data collected until February 2018, had been identified for an investigation into claims of excessive cash sales during the demonetisation period and were sent notices to explain the sources of their income.
As reported on July 25, in its quest to fight corruption the government had attached more than Rs. 4,300 crores of benami properties in the country.
Benami properties are those assets which are bought by an individual, not under his or her name. It can include properties which are held in the name of spouse, child or any other family members, for which the amount is paid out of known sources of income.
Experts believe the Benami Transactions (Prohibition) Act 1988 which was amended by the present government to provide more teeth to fight against illicit transactions and black money, is stringent and infractions can lead to imprisonment up to seven years and fine for violation of the Act which may extend to 25% of the fair market value of the benami property.
Recently, the government cracked down more than 16,500 shell companies and has put another 80,000 companies under the scanner and has also introduced a reward scheme to clamp down on benami properties.