I-T men to scan lesser bank withdrawals too | india | Hindustan Times
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I-T men to scan lesser bank withdrawals too

TAX OFFICIALS may poke around those frequently withdrawing cash of slightly less than Rs 25,000 from non-savings accounts of banks on a single day, as part of the government's efforts to keep track of black money generation.

india Updated: Jan 13, 2006 13:17 IST

TAX OFFICIALS may poke around those frequently withdrawing cash of slightly less than Rs 25,000 from non-savings accounts of banks on a single day, as part of the government's efforts to keep track of black money generation.

The move is being mulled, as the tax authorities has received reports that some black money generators avoid giving any clue to the authorities by not falling under the net of Bank Cash Transaction Tax (BCTT) as they withdraw slightly less than Rs 25,000 from banks on a single day, sources in the department said. The department may investigate only those bank branches where the number of such transactions have shot up unexpectedly, they added.

BCTT is imposed on individuals for withdrawing Rs 25,000 or more in cash from non-savings bank account and on corporates for at least Rs 1 lakh withdrawal. The tax, imposed in this year's budget for the first time, is aimed at unearthing black money. Meanwhile, BCTT has already started yielding results with the department nabbed many people across the country for black money generation through large withdrawals of cash from banks.

Talking to Hindustan Times a senior Income Tax officer said that the process of unearthing black money through the tax on cash withdrawals has begun. The department has identified bank branches that have had unrealistic spikes in cash withdrawals from current accounts since June this year.

Given apprehensions that banking channels are used to launder black money, I-T authorities want to ascertain whether cash withdrawals from these branches were to meet normal expenses in the course of business, said sources. If this is established, there will be no further enquiries, said sources.

“We would also take the cases of slightly less than Rs 25,000 withdrawal into scrutiny,” he added. All scheduled banks, including cooperative banks, are collecting BCTT. When cash is withdrawn in excess of these cut-off limits, the bank debits the amount of cash withdrawn and also the amount of BCTT payable by the account holder.

Similarly, on encashment of term deposit, the bank deducts the amount of BCTT payable and pays the balance to the person encashing the term deposit. Meanwhile, Banks, including cooperative banks, have started providing a monthly summary to the I-T Department on the number of transactions in each branch and the amount of tax (BCTT) collected in a month.

Each bank also has to maintain a transaction-wise record — which includes, among other things, the account number, name and address of the person and the value of BCTT.