The income tax department is set to scrutinise the annual information reporting (AIR) of entities and individuals who make high-value deposits to banks while exchanging old currency notes. Sources said the department will take up cases for scrutiny in the next 50 days starting November 10.
“Once a case is picked for scrutiny the department will call for information from the assesses and the onus will be on the assesses to show the source of the money and if it was disclosed to the income tax department. The disclosures are not exempt from action from agencies such as the service tax, sales tax, income tax,” said a source.
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Should an entity or individual fail to account for the money disclosed, they will have to pay 30 per cent tax on the undisclosed income.
The Financial Intelligence Unit-India will also compile reports on high-value transactions and disseminate these to various agencies.
Apart from PAN-reportable transactions, the scope of AIR extends to additional transactions such as cash withdrawals from accounts and credit card transactions.
Under the new AIR disclosure norms, it is mandatory to report cash withdrawals/deposits totalling Rs 50 lakh or more in a financial year from/in the accounts of a person or company, and deposits of Rs 10 lakh or more from the accounts (other than a current account and time deposit) of a person.
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