How to Handle Income Tax SMS/Email Recd. Post Demonetisation

www.ecompliancepartner.in February 02, 2017 +91-9711215657

Did you get an email or SMS from Income tax department post demonetisation?

Income tax department (ITD) has launched “Operation clean money” in respect of cash deposit between 9th November 2016 to 30th December 2016 and used data analytics for comparing the demonetisation data with the information available in ITD database.

In the first batch, around 18 lakh persons have been identified in whose case, cash transactions do not appear to be in line with the tax payer’s profile and SMS or email has been sent to them seeking more information.

FAQ

1. Whether the SMS or email is a notice under Income tax Act. No, SMS or Email is sent by ITD for seeking more information from the person. These can’t be considered as notice under Income tax Act.

2. What is the prescribed time limit for response? As per the press release dt. January 31, 2017, the tax payers covered in this phase should submit their response within 10 days.

3. What is the mode of response?

Only online response is required to be submit.

4. Whether the person is required to visit office of Assessing Officer or any other office of ITD? No, there is no need to visit the office of Assessing officer or any other office of ITD.

5. What will happen if reply is not made? If the response is not made online within the reasonable time ITD can issue any notice Income tax Act and take enforcement actions as well. Moreover actions can be taken under other applicable laws along with Income tax Act.

6. Can response once submit be modified? Yes, the used can modify his response by clicking “Submit” button.

7. Whether the transactions listed under Cash Transactions 2016 are the only transactions known to ITS? ITD is getting formation from banks and processing such information with the help of data analytics. Information on the ITD portal will be dynamic and will update on receipt of new information, response and data analytics.

Summary of actions required

Step by step guide for online verification

STAGE 1: VIEWING INFORMATION

Step:1 Login to e-filing portal at https://incometaxindiaefiling.gov.in.

Step:2 Click on “Cash Transactions 2016” link under “Compliance” section.

Step:3 Cash deposits during 9th Nov to 30th Dec 2016 will be displayed as :

Cash transaction data is only shown in cases where it does not appear to be in line with the taxpayer profile.

The information on the online portal will be dynamic and will be updated on receipt of new information, response and data analytics.

Here information will be provided about all cash deposit between 09/11/2016 to 30/12/2016 whether deposited in specified bank notes or new currency notes.

If the person choose to provide information about any other bank then he need to fill information about specified bank notes only.

STAGE 2: SUBMISSION OF RESPONSE

Step:1 After clicking submit, the user is provided with two options i.e. “The account relates to this PAN” and “The account does not relate to this PAN”. If the person choose option “The account does not relate to this PAN” then message “Your feedback will be sent to the information source for confirmation.” will be displayed. On clicking the submit button, the success message along with Transaction ID is displayed on the Screen.

Step:2 If the user selects the response option “The account relates to this PAN” the screen for capturing details will be displayed to the user.

If the cash deposit amount displayed under A.4 is not correct, please mention the correct amount under A.5.

If cash is claimed to be from more than one category (or out of cash in hand), the source of cash may be assigned under various categories in the following sequence (Adopting other sequence may result in case being selected for verification based on risk criteria)

a) Cash withdrawn out of bank account (Refer B.3) b) Cash received from identifiable persons (with PAN) (Refer B.4) c) Cash received from identifiable persons (without PAN) (Refer B.5)

d) Cash received from un-identifiable persons (Refer B.6) e) Cash out of receipts exempt from tax (Refer B.2) f) Cash out of earlier income or savings (Refer B.1) g) Cash Disclosed/To be disclosed under PMGKY (Refer B.7)

Exempt income like agriculture income etc. but excluding Donations, Gifts etc. In case cash is claimed to be withdrawn out of bank account, the account wise details are required to be provided

The drop down values of “Nature of Transaction” should be entered as per the codes

mentioned below:

For any information/clarification feel free to contact:

H2O Consulting (P) Ltd. E-192, Vishwas Park, Uttam Nagar New Delhi-110059 E: info@ecompliancepartner.in M:+91-911215657

Drop down Code to be specified in CSV(case sensitive) Cash Sales RS Loan received in Cash RL Loan repayment in Cash RR Gift Received in Cash RG Donation Received in Cash RD Other Cash Receipt RO

In case there are multiple entries under B.3 to B.6, facility has been provided for online submission

as well as upload of CSV (Comma Separate Values).

The sum of all sources of cash deposits (B.1 to B.7) should match with the confirmed cash deposit

amount (A.5) such that balance (refer B.8) is computed as 0.

Step:3 On successful validation, the success message along with Transaction ID is displayed.