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Govt to set threshold for investigating into deposits, to curb harassment of taxpayers

In a bid to curb possible harassment of taxpayers during investigations into bank deposits post-demonetisation, the government is looking to lay down norms for tax officers, including a threshold below which scrutiny will not ordinarily be initiated.

Even as estimates of cash deposits made by individuals are still being worked out, the tax department is analysing a mountain of data related to demonetised currency notes that were deposited in bank accounts between November 10 and December 30.

Initially, the government said cash deposits of Rs 2-2.5 lakh made by housewives and small businessmen and traders would not be questioned. But amid largescale deposits by “money mules”, it began analysing data for deposits of Rs 30,000 and above in case of Jan Dhan and dormant bank accounts that sprang to life November 10 onwards.

As elections to five state assemblies near, with both BJP and the opposition making demonetisation a major issue, the government seems sensitive to the possibility of bad publicity resulting from honest deposits being questioned. It is a narrative that the party is keen to avoid.

Tax authorities suspect that cash deposits amounting to as much as Rs 4 lakh crore may be unaccounted wealth that found its way into the banking system. Though data is being analysed and the focus is on high value, the government is wary of being accused of harassing the common man.

“Arbitrary action will anger public opinion that has largely supported demonetisation. We don’t want an inspector to start proceedings,” said a source, adding that investigations, particularly those below a specified limit, should be cleared by senior officers.

 A section within the government fears that the hunt for black money may result in giving undue discretion to tax officials, which should be avoided as it would expose NDA to the charge of “tax terrorism”, a term PM Narendra Modi used for the UPA government during his 2014 campaign.


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