Lok Sabha Question No. 2242 (UNSTARRED), answered on 2021-08-02
Subject: High Value Deposits
Ministry: FINANCE
Asked by: Rajiv Ranjan (Lalan) Singh

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA UNSTARRED QUESTION NO. 2242 TO BE ANSWERED ON MONDAY, 02 ND  AUGUST, 2021

SRAVANA 11, 1943 (SAKA)

## HIGH VALUE DEPOSITS

## 2242:  SHRI RAJIV RANJAN SINGH ALIAS LALAN SINGH:

Will the Minister of FINANCE be pleased to state:

(a)whether the Government is investigating heavy deposits made during 50 days period of demonetisation;

- (b) if so, the details thereof;
- (c) whether an investigation is also being done on financial institutions against their high value deposits; and
- (d) if so, the details thereof along with the status of investigation so far?

## ANSWER MINISTER OF STATE FOR FINANCE

## (SHRI PANKAJ CHAUDHARY)

- (a) & (b): During demonetisation, large cash was deposited in bank accounts, and it became possible to track the owners of cash. The Income Tax Department (ITD) took a number of prompt actions on those found to be involved in misuse of the scheme of demonetisation. These actions, inter-alia, included the following:
-  The  Income  Tax  Department  conducted  searches  in  900  groups  during  the  period November 2016 to March, 2017 leading to seizure of Rs. 900 crores, including cash of Rs. 636  crores  and  admission  of  undisclosed  income  of  Rs.7961  crores.  During  the  same period,  8239  surveys  were  conducted  leading  to  detection  of  undisclosed  income  of Rs.6745 crores.
-  The cash deposit data was analyzed to identify those persons whose cash transactions did not appear to be in line with their profile. Regular emails and SMS were sent to them for submitting their response online. This exercise promoted voluntary compliance.
-  Further, electronic campaign was initiated in case of non-filers depositing cash between Rs 5-10 lakh. Further, 3.04 lakh persons who had deposited cash of Rs. 10 lakh or more but  had  not  filed  their  return  of  income  till  due  date  of  filing  returns  were  identified. Overall, Self-Assessment Tax of more than Rs. 13,000 crores was paid by targeted nonfilers.
-  In  respect  of  cases  where  high  deposits  were  made  post  demonetisation  and  the corresponding returns of income were not filed, notices u/s 142 (1) of Income Tax Act, 1961  were  issued  for  filing  of  returns.  Assessment  orders  have  been  passed  making requisite additions in these cases.
-  Further, in cases where the Returns of Income were filed by the depositors, the income tax returns  and  demonetization  data  were  analyzed  under  Computer  Assisted  Scrutiny Selection (CASS) and cases were selected for scrutiny on account of various scenarios related to demonetization.  After scrutiny, assessment orders have been passed in large number of cases wherein substantial additions have been made.
-  In suitable cases, penalties have also been levied.
-  It may also be mentioned that because of sustained non-intrusive campaign by the Income Tax Department post demonetization, during F.Y. 2017-18, the net collection of direct taxes increased by 18% at Rs. 10.03 lakh crore as compared to previous year. This was the highest growth in preceding seven F.Y.s.  There was also exceptional growth in Personal Advance Tax of 23.4% and Personal Self-Assessment Tax of 29.9% in F.Y. 2017-18 in comparison to F.Y. 2016-17.

Further, Directorate of Enforcement (ED) has registered 9 cases under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA, 2002) and 5 cases under  the Foreign Exchange Management Act, 1999 (FEMA, 1999) with respect to heavy deposits made during the period of demonetisation.

(c) & (d): Directorate of Enforcement (ED) has registered one case under the provisions of FEMA, 1999 against a Financial Institution with regard to their high value deposits.

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