The Income Tax (I-T) Department is likely to initiate action by the end of this year against those who had deposited in their bank accounts cash in excess of Rs 2.5 lakh—the limit set by the government during the 50-day period, after demonetisation was announced by Prime Minister Narendra Modi on 8 November last year.

“The I-T Department has almost completed its preliminary investigation and has zeroed in on 4.5 lakh bank account holders for making spurious cash deposits in their accounts,” a Ministry of Finance source told The Sunday Guardian.

According to official sources, the I-T Department sent notices to 18 lakh people, asking them to file their reply for making deposits in excess of the limit prescribed by the government. Out of those who have been sent notices, only 5.7 lakh account holders had replied until 12 February this year. A second-tier investigation in the rest of the cases is also going on. “After an extensive exercise of matching the replies filed by account holders, with their existing data or tax statement, the I-T Department has found almost 4.5 lakh bank account holders guilty of making spurious cash deposits in their bank accounts,” a senior I-T official said.

“We are working on matching the data of bank account holders to their tax statements filed in the same year and a case-to-case basis investigation process is on. However, the preliminary investigation has been completed and the I-T Department has started sending notices and calling for hearing individuals who had made illegal cash deposits in their accounts,” Surabhi Ahluwalia, spokesperson of the Central Board of Direct Taxes (CBDT), told The Sunday Guardian.

“Once the hearings of persons involved in depositing excess cash in their bank accounts are over, action against all such individuals will be taken,” Ahluwalia said.

The I-T Department is also investigating 7.5 lakh high-value illegal deposits made in Jan Dhan accounts, a banking facility for the poor.

Talking to The Sunday Guardian, another senior I-T official said, “The scrutiny process of all suspicious accounts is being delayed due to lack of infrastructure. The I-T Department is grappling with staff crunch and is, therefore, taking time to complete the investigation of bank accounts where high-value deposits have been detected during the demonetisation period.

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