The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Aman Sadha, MBA 2016-18, Vinod Gupta School of Management, IIT Kharagpur
According to the sources, Government claims to have identified 18 lakh individuals who will be required to disclose the large cash transactions through their individual accounts soon after the demonetization rule by the PM of India, Narendra Modi. These accounts were identified using data analytics, in the period of 9th Nov 2016 to 30th Dec 2016, by matching the transactions of an account with the account holder’s tax profile.
For the convenience of the people, tax department has enabled online verification of these transactions. Every permanent account holder would be able to view information about their transactions through income tax e-filing portal. Swacch Dhan Abhiyan is a tax department’s programming software which is supposed to be used for getting answers on the deposits made, and only after a preliminary session of questions and answers, legal actions would be taken. Furthermore, for the ease of people, they will also be informed through messages and emails by income-tax department. The accused will have to file their explanations online at ‘www.incometaxindiaefiling.gov.in’ within 10 days to avoid notices and legal enforcement.
According to the Income tax department, in the initial phase, they will put up data of people, using data analytics, who deposited more than 5 lakhs during the period or who has poor tax compliance or with suspicious transactions up to 5 lakhs. If tax department gets satisfied with the information, there would be no follow up. Tax department has also provided a reference guide and a helpdesk number for the smooth functioning of this initiative. Additionally, the verification will be closed if the cash deposit is made under Pradhan Mantri Garib Kalyan Yojan (PMGKY), the disclosure scheme of black money. This initiative has received mixed responses from the general public, but it is surely going to create trouble for the arbitragers, who took this demonetization as an opportunity for lifting up their bank balances.