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Demonetization Effect: Jewellers under radar of IT department

Wednesday, January 22, 2020 • Tamil Comments

The demonetization of high-value currency happened in 2016.  More than three years later, the "shock therapy" continues to be in the news.  In this case, it's in the news because the Income Tax Department is using the data of cash deposits made in banks by jewellers soon after the announcement of demonetization.  With the help of this crucial data, the IT Department is going after those super-rich jewellers who deposited crores of rupees between mid-November and 31 December 2016.  

As reported by a national daily, many jewellers who had been disclosing just under Rs 2 lakh of income for years happened to deposit Rs 2-4 Cr or so in their bank accounts in a matter of a few weeks!  The IT Dept suspects that all of this was black money.  

These jewellers will be issued notices and questioned.  

The movement in this regard is part of the IT Dept's efforts to widen the tax base.  About 40% of those who file IT returns show that they have no tax liability.

As part of its Project Insight, the IT Dept wants to strengthen a non-intrusive information-driven approach to enhance tax compliance.  Eventually, it wants to ensure simplification and automation through pre-filled return forms.

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