Revised returns under I-T scanner, spike in income post demonetisation may invite scrutiny
In yet another measure to check black money, the government has now decided to take a fresh look at revised income tax returns filed by individuals and businesses. The government, it is learnt, will undertake scrutiny of those whose records show a significant spike in income post the November 8 demonetisation exercise.
“Questions need to be asked where there is a sudden spike in income and a revised return is filed,” an Economic Times report said citing a senior income tax official. “We will take them up for scrutiny.”
These fresh cases will be over and above the 1 lakh cases already identified for scrutiny based on information collated through banks. However, the process is unlikely to see mass scrutiny and will selective and focused, officials were quoted as saying.
The development comes after the lackluster response to the government’s window for black money-holders to come clean. As per the Finance Ministry, only about Rs 5,000 crore was deposited under the Pradhan Mantri Garib Kalyan Yojana that was launched in the wake of the note ban to give people one last chance to come clean.
It is this figure that has prompted the Income Tax department to take a look at suspect cases. Officials believe that a higher revised income could indicate hidden non-tax paid incomes or unaccounted cash from previous years being disguised as a rise in sales. There have been instances where individuals and businesses resorted to showing higher income or sales and revising their returns filed after demonetisation.
The tax laws allow for filing revised returns if some income is missed out unintentionally.