Modi government steps up tax heat on suspicious bank deposits post note ban

In a move to push operation clean money, the initiative aimed at those who had deposited large piles of cash since November, the government may be now looking to intensify scrutiny.

It is understood that people are staying away from declaring their unaccounted money. The main issue, say industry trackers, is a high tax rate. The government is set to slap 50% tax on unaccounted money, allowing only 25% of the total amount to be accessed by the taxpayer immediately.

The government had commenced the exercise of issuing tax notices last month. It is now aiming to target those individuals who had deposited unaccounted cash in banks after demonetisation was announced in November.

It is understood that the government has asked tax officials to go hard after tax evaders in the coming months after the scheme received lukewarm response.

The income tax department is taking the help of technology for identifying and targeting tax evaders. Data analytics had raised red flags in several bank accounts where cash was deposited.

Based on the information, the tax department has already begun raising queries with regard to what it thinks are suspicious bank deposits, including cooperative banks.

About 1.5 lakh account holders have deposited more than Rs 10 lakh each and there have been suspicious cash deposits in one crore accounts belonging to 75 lakh people.

The tax department is specifically targeting some people in the first round based on big data analytical tools deployed by the Central Board of Direct Taxes ( CBDT). This is being used to examine bank deposits to segregate black money holders from genuine taxpayers. It compares tax returns of individuals, tax paid by companies owned by some people and other tax-related data with information collected from banks on how much money was deposited by individuals.