After the Income Tax Department sent email/SMS to 18 lakh people, asking them to file their response on the e-filing portal, deposits made by nearly 9 lakh people above Rs 5 lakh have been put under the ‘doubtful category’. However, legal action against such people will be taken only after March 31, when the tax amnesty scheme comes to an end. The deposits in the ‘doubtful category’ are from people who have not responded to the email/SMS sent to them. These deposits were made in old Rs 500 and Rs 1000 currency notes during the 50-day window provided under the demonetization drive.
Since emails/SMS sent by Tax Department is not legally binding, tax officials will have to wait until these people file their tax returns. However, just showing the deposits in tax returns cannot free them from their tax obligations. Action can still be taken if it is found that the money deposited does not match their source of income. In that case, it would be treated as unaccounted wealth or black money and appropriate legal action will be taken against such people.
The Pradhan Mantri Garib Kalyan Yojana (PMGKY) will end on March 31, post which, the Tax Department will send formal notices to people suspected of depositing unaccounted money in their bank accounts. People have time till March 31 to declare their black money, on which, a penalty of 50% will have to be paid and an additional 25% will have to be parked in a non-interest bearing deposit for four years.