Trove of cash awaits scan

TT, New Delhi, Jan. 10: The Centre says it has unearthed a cash trove of Rs 3 to 4 lakh crore that it believes is black money channelled into bank accounts in an effort to hoodwink tax sleuths.

"We now have trunkloads of data; our analysis shows that sums of more than Rs 2 lakh each were deposited in over 60 lakh bank accounts post-demonetisation. The total amount parked in these accounts is more than Rs 7.34 lakh crore," an official said.

The income tax department has been asked to analyse the data and send notices to the depositors.

However, chartered accountants are sceptical about the government's estimate that is suspiciously close to the projection of black money that government officials had made after the Prime Minister's announcement on November 8.

The government had believed that this sum would not come back into the banking system. Banks were, however, swamped by deposits unofficially estimated at 94 per cent of the Rs 15.44 lakh crore worth of cash - or 86 per cent of the money in circulation - that was scrapped in one stroke.

Tax analysts said most of those who had made large deposits of old money in their bank accounts were likely to have legitimate answers and the necessary back-up paperwork to prove that these sums either represented what businesses categorise as cash in hand or savings from recognised and tax-paid incomes.

"Many businessmen and salaried people kept large sums for a variety of reasons ranging from cash in hand for business, medical emergencies and funds for children's education. Most have paid income tax on that money; so they will have nothing to fear. However, there will always be a small percentage of black sheep," said Sudatto Sen, a Delhi-based chartered accountant.

Analysts said tax evaders have used ingenious money-laundering methods, ranging from colluding with jewellers to buy gold trinkets supported by backdated bills and providing cash inducements to the poor to park money in their Jan Dhan accounts.

Small firms have been persuaded to inflate the amount they show as cash in hand in exchange for a monetary compensation while others have tried to mask the unaccounted wealth by paying advance salaries to their workers or providing loans to employees.

More than Rs 10,700 crore cash was deposited in different accounts in some Northeastern states since November 9, an official said.

The income tax department and the Enforcement Directorate are looking into over Rs 16,000 crore deposited in different accounts of cooperative banks.

The big data trawl has thrown up a few more facts: a sum of Rs 25,000 crore cash was deposited in dormant bank accounts while loans worth over Rs 80,000 crore were repaid in cash November 8.

Officials said that suspicious transactions would be verified. If the replies are not satisfactory, the tax dodgers will have to pay a penal 50 per cent tax on such cash mountains before March 31.