How Much Cash Can You Deposit at a Bank

After the demonetisation, the banks are instructed to levy charges on cash transactions above a sure limit. Farther, RBI has made it mandatory to investigate unusual greenbacks transactions. This is because a lot of malpractices were noticed when cash deposits of Rs. 500 and Rs. 1,000 notes were made during the demonetisation period. A circular was passed by the Finance Ministry describing the standard operating procedure, for assessing officers, to be followed while handling such cases. There are specific cases when a verification warrant may be issued for your transaction:

Who can be put under scrutiny

In that location tin be many scenarios that call for scrutiny. Some of the scenarios are mentioned below:

• Cash deposited from earlier income or savings
  • Individuals who deposit cash above Rs.two.five lakh and senior citizens who deposit cash to a higher place Rs.5 lakh may exist scrutinised. Whatever amount within the specified limit will exist excluded from scrutiny because that the money is from household savings, cash withdrawals, earlier income, and so on.
  • In the case of individuals without business organization income, deposits above the mentioned limits will exist verified by the assessing officers. Businesses whose books of accounts showing full savings that are more than than the closing cash balance equally of 31 March 2022 (AY 2016-17) will be investigated.
  • Bank accounts that are suspected of being misused for coin laundering or taxation evasion or entry operations in shell companies will exist completely investigated.
• Cash from tax-exempt receipts Any backlog greenbacks out of receipts that are exempt from the tax should be in line with the income tax returns filed earlier past the same person. In a instance where it is otherwise, the assessing officer may call for relevant information.
• Cash withdrawn from a bank account cash deposits that don't lucifer the individual's bank statements phone call for suspicion even if he says the coin was withdrawn from the bank account. The assessing officeholder may seek a copy of the bank statement to explicate the greenbacks deposits and withdrawals out of the banking company account.
• Greenbacks received from identifiable persons In the case of cash received from identifiable persons (with PAN), the assessing officer will non telephone call for further data from the taxpayer. Instead, the assessing officeholder will seek information from the assessing officer of such an identifiable such identifiable person. In the instance of a gift, the assessing officeholder would verify whether the same is taxable in the hands of the recipient under section 56(2) of the income revenue enhancement law.
• Cash received from unidentified people In the instance receipts from unidentifiable persons (without PAN), the assessing officer will verify whether the cash receipts are in line with the normal practices of the business of the taxpayer. If cash transactions are not in line with the normal practices of business, the assessing officer may ask y'all to submit documents, such every bit monthly sales summary and stock registers, for verification. In the case of other unidentifiable persons, the assessing officer will verify whether the cash transactions are in line with the normal business practices in accordance with the earlier return of income. The assessing officer may seek information such every bit monthly sales summary, relevant stock annals entries, bank argument etc to pinpoint instances of backdating of sales or fictitious sales. To identify instances of backdating of sales, an AO may wait into:
  • An abnormal increase in the percentage of greenbacks sales during the menses of Nov-December 2022 or earlier periods.
  • Multiple deposits of demonetised currency late in December 2016.
  • Non-availability of stocks or attempts to inflate stocks.
  • Transfer of banking concern accounts that are not used previously.
  • The same process will exist used for verification of donations and other cash receipts.
• Greenbacks disclosed or to be disclosed under PMGKY In the case taxpayer discloses greenbacks under Pradhan Mantri Garib Kalyan Yojana (PMGKY), the suspected greenbacks transactions tin be verified with disclosures made under PMGKY.

How does the e-verification process work

The online verification has been enabled on the e-filing portal which will exist synchronised with the internal verification portal of the income tax section. The features of the portal are listed below:

• People under scrutiny can submit explanations online through their login on the eastward-filing portal. They practise not need to visit the income revenue enhancement office. PAN holders can view this information using the 'Cash Transactions 2016' under the 'Compliances' section.
• An SMS and electronic mail volition be sent to all persons nether scrutiny directing them to submit online responses on the east-filing portal. Such persons who are not registered should register immediately under 'Register yourself' link. Registered taxpayers must update their e-mail address and mobile number on the portal are accurate to receive advice from the department.
• Individuals can check the guides and FAQs section of the IT department's website to submit their responses.
• Low-adventure cases tin can be closed centrally, while the other cases will be assigned to AOs for verification.
• AOs will view all submissions and enquire to submit further verification proofs online. The supporting documents must be submitted online.
• If the documents and proofs submitted online are satisfactory, the AO will shut the verification online.

What to do if you are stuck in the process

If you lot have whatever sort of questions or queries during the process, you can find guidance past referring to the 'Help' section of the eastward-filing portal. You tin can also refer to the FAQs to detect a solution for your queries. Alternatively, you lot tin can refer to a document titled 'Greenbacks Transactions 2022 User Guide'. You can likewise learn from the 'User Guide on Verification of Greenbacks Transactions on ITBA-AIMS module', a guidelines document AOs abide by during verification.

Closure and Approval

Assessing officers accept the liberty to close a person'south records afterward verification with due permission from the apropos authorities. The relevant authority for tier-1 cities is Boosted/Joint CIT heading the range for transactions below Rs.x lakh. For other cities, the AO needs to refer to the Pr. CIT.

Not-compliance and Penalty

In the example of non-compliance, the AO tin view the ITS profile of the PAN holders, practice powers nether Department 133(6) with the approval of the prescribing say-so, survey activeness under Section 133A, and more. On the other hand, the AO can consider initiating penal proceedings under section 269SS or 269T of the Deed.

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Source: https://cleartax.in/s/itd-defines-guidelines-verification-suspicious-bank-accounts

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