More than 90,000 persons who deposited ₹10 lakh or more cash in their bank accounts during the demonetisation drive in November 2016 are on the radar of the Income-Tax Department for not filing their tax returns by March 31, 2018.

The Department had served notices on nearly 3 lakh non-filers who deposited ₹10 lakh or more in their bank accounts following the demonetisation announcement.

“Of these, nearly 2.1 lakh filed their returns by the March 31, 2018 deadline. The rest will now face action,” a senior I-T Department official told BusinessLine .

For failure to file returns, tax authorities can send notices and levy penalties ranging between 50 per cent and 200 per cent of the tax liability. Also, the interest on late payment will accrue till the date of tax payment. Non-filing can also lead to prosecution.

Sanjay Kumar, Senior Director at Deloitte India, said the penal provisions in Indian laws are quite stringent. “Tax authorities may also refer cases for review under various other laws like black money law, FEMA, etc. And each law will have its own implications as well.”

Till date, in three phases of ‘Operation Clean Money’ (OCM), the I-T Department has identified around 22.69 lakh persons whose tax profiles were inconsistent with the cash deposits made by them during the demonetisation period. About ₹.5.27-lakh crore was deposited in bank accounts by these 22.69 lakh persons during the period. However, tax authorities are still to ascertain the exact amount of unaccounted income in such transactions, as the assessment process is going on.

On the basis of approved risk criteria, cases involving huge cash deposits were selected for e-verification in the first phase of OCM. Under e-verification, the tax department had sought explanation regarding source(s) of cash deposits. It drew 11 lakh responses.

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