On February 1 all
those who had deposited cash of more than Rs. 250000 in OLD CURRENCY between
the designated dates received the following notices from the Income Tax
Department:
"Income-tax
Department (ITD) has received 1 information record(s) showing total cash
deposits of Rs. xxxxxxx relating to you. ITD has enabled online verification of
the cash transactions and there is no need to visit Income tax office for
submission of response. The information in respect of these cases has been made
available in the e-filing portal. Please submit your response by following the
below steps.
Step
2: Click on “Cash
Transactions, 2016” link under “Compliance” section.
Step
3: The details of
transactions related to cash deposits during 9th Nov to 30th Dec 2016 will be
displayed
Step
4: Submit your online
response for each transaction.
- Click here to
refer the “Quick Reference Guide for Online Verification of Cash
Deposits”.
- For detailed “User Guide on Online Verification of
Cash Deposits” click here.
Kindly
submit your response on or before 10-Feb-2017.
Note:
Please ignore this mail, if you have already submitted the response.
Regards,
e-filing Team
Income Tax Department"
e-filing Team
Income Tax Department"
Once you login, the bank details and
cash deposited in respective banks is reflected. One needs to click on a
particular bank and then fill options in section ‘B’. This section is divided
into:
B1 – Cash out of earlier income or
savings.
B2 – Cash out of receipts exempt from
tax.
B3 – Cash withdrawn out of bank account
(give complete bank details).
B4 – Cash received from identifiable
persons (with PAN). In this option address and PIN Code are not mandatory, as
the PAN is sufficient for compliance. The options include a) cash sales b) cash
loan received c) loan repayment in cash d) gift received in cash e) donation
received in cash f) other cash receipts.
B5 – Cash received from identifiable
persons (without PAN). In this option it is mandatory to give name of person,
address, pin code and amount. Apart from this one has to select amongst the
options a) to f) given in B4 above.
B6 – Cash received from unidentifiable
persons. Here one has to fill the amount and mention anything one feels
relevant in remarks.
B7 – Cash disclosed/to be disclosed
under PMGKY.
B8 – Balance. This is automatically
computed after filling in the relevant columns and should become nil on
complete compliance. I am sure if there is any difference a scrutiny notice is
going to be the likely outcome with all its attendant issues.
I had complete faith in the PM when he
announced the cash ban, in fact I had written to PMO in June/July last year
requesting a banning of the 500/1000 currency notes if one had to get rid of
corruption, terrorism, etc along with their attendant problems. I was one of
the happiest persons when the announcement was made. In fact, I personally was
not affected by the cash ban as all my transactions are either online, credit
card or cheque. Now, on some of my clients receiving the above notice, we were
under the impression compliance should be simple, but why am I surprised that
the compliance is not as simple as I thought it should be!!
One of my clients is a Trust with
donations which come in lakhs in cash of small amounts. The donors are in
thousands. All details are available and we want to do the compliance. The
department has also given a csv file to be downloaded, filled with the data and
then uploaded. What I fail to understand is why would the department put a
restriction of 500 lines for uploading. The system refuses to accept more than
500, with the result that a difference continues to appear in B8. What was the
logic in having such a restriction? A mail to the helpdesk got an automated
response giving you a ticket number and saying that you will hear from the
department soon to resolve your query. A call to the help line got a response
saying that everyone has the same query as above. Now, one does not know what
will be the response if one does not file the response on time. Knowing the ITD
I won’t be surprised if harassment starts by way of summons etc.
The other aspect was the notice was to
come in respect of only 500/1000 rupee notes which were scrapped and deposited.
But one of my clients who is a doctor who runs a pathology laboratory has got a
notice for sum total of cash deposited, including the new currency and small
denomination notes deposited. The FM had said analytics would be used before
notices are sent, I am sorry to say in case of this client nothing of the kind
happened, because a cursory examination of previous bank records would have
shown and average of Rs. 5 lakhs plus in cash deposits every month! This client
charges Rs. 150 to Rs. 1000 plus for various categories of tests – some of
these clients are Out Patient Department patients, who just come for the test
one off and do not return. Their phone number is available but not their
address. Addresses of regular patients is kept – so how does one comply when
one does not have the address of the patient. We have done the compliance by
mentioning ‘Out Patient Department patient’ and the clinic pin code and amount.
In the remarks column, we have mentioned that the patients are OPD patients
whose addresses are not available, and the cash deposits are in line with
regular monthly deposits. The other aspect is this client had more than 700
line items and we could not upload the entire file. What we did was upload the file,
it takes 500 line items, then B8 shows the difference. We made a manual entry
for the difference stating that details available, but cannot upload the same
due to 500 line restriction, and submitted the response. We are now waiting to
see what the response from the ITD will be!! The other issue which hampers
smooth uploading is the 15 minute time window given for uploading documents –
we spent the entire day yesterday in trying to submit two responses!!
The problem for retail stores or those
dealing in cash or those who have cash sales is going to be humongous as having
the restriction is going to cause undue hardship and mental stress, all when
the government and finance ministry had promised no harassment. The harassment
has actually begun because the primary data collected includes all cash
deposits and not the promised banned 500/1000 notes which were to be looked
into. If the ITD did not have its basic in places before calling for
information – then they should not have done so. It is election time and the
honest tax payer is feeling victimised, though I guess from the election point
of view he is too small a constituency for the politicians to worry about!
CA Girish Borkar
