How to response Cash Deposit Notice

How to response Cash Deposit Notice

Income tax department (ITD) has been started to send notice in respect of cash deposited by a person during the period of 09th November to 30th December 2016. Around 18 lakh persons have been identified by ITD whose cash transaction does not match with tax payer’s income tax profile.

To view the information in respect of cash deposited by taxpayer, one should login their income tax profile by visiting the www.incometaxindiaefilling.gov.in.

After login to e-filing portal at www.incometaxindiaefilling.gov.in you should click the “Cash Transaction 2016” link under the “Compliance” Section. After clicking the same the detail of transaction related to cash deposit during the 9th November to 30th December 2016 will be display.

In case if some bank account in which tax payer has deposited the SBN (and the same is not reflected in the above portal) then it is advisable to submit the detail of other bank account in which specified bank notes (SBN) has been deposited. After review SBN deposit detail, taxpayer may submit response.

Submission of response: –

1. Confirmation of Account: Under this step if the amount reflected in your income tax profile does not belong to yourself then you should click “The account does not relate to this PAN” and submit your response. Your submission will be sent to the information sources for confirmation.

On the other hand, if the amount reflected in your income tax profile belong to yourself then you should click “The account relates to this PAN”. After clicking the same the screen for capturing further details will be displayed to the user.

If the account belongs to the PAN but the value of cash deposit is not correct then user should select “The account relates to this PAN” and correct amount of cash deposited can be submitted in the details screen.

2. Explanation of Cash Deposit:

A. Account Detail: Under this section user should check value of cash deposited in the Bank. If the value of cash deposit is not correct then user can correct value of cash deposit during the period between 09th Nov 2016 and 30th Dec 2016 and may leave a remark.

B. Sources of Cash Deposit: After verifying the cash deposit the tax payer should explain the Sources of Cash deposit in Bank account i.e. from where cash has been deposited by tax payer. Source of cash deposit may be from one or more than of the following option: –

Sources of Cash Deposit
B.1 Cash out of earlier income or Saving Amount + Remark
B.2 Cash out of receipts exempts from tax Amount + Remark
B.3 Cash withdrawn out of bank account Account wise List
B.4 Cash received from identifiable persons (With PAN) PAN Wise List
B.5 Cash received from identifiable persons (Without PAN) Person wise List
B.6 Cash received from unidentifiable persons Nature of transaction wise
B.7 Cash Disclosed / to be disclosed under PMGKY Amount + Remark

 

In respect of sources of cash as specified under B.4, B.5 and B.6, the user also provide information in respect of Nature of Transaction. Nature of Transaction may be Cash Sales, Loan received in Cash, Gift received in Cash, Donation received in cash and other cash Receipt.

After providing the cash source detail the user can submit the same. The user can view submitted responses. The user can revise the submitted response by clicking on the “Submit” button.

Income tax department will assess the response filled by the taxpayer. In case explanation of source of cash is found justified, the verification will be closed. The verification will also be closed if the cash deposit is declared under Pradhan Mantri Garib Kalyan Yojna (PMGLY).

If the taxpayer is not registered till now with Income tax department (ITD) and he/she has deposited cash during the period from 09th November to 30th December 2016 or otherwise, then it is advisable to register yourself to ITD. The reason is if the taxpayer has not deposited cash in his account by himself even then he can check the same under this compliance window. Because there may be chances that your PAN has been misused for depositing Black Money.

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