I-T lens on assessees who repaid huge dues in old notes

Tarun SharmaMoneycontrol 

The Income Tax department has started shooting off notices to tax assessees who repaid their huge dues to government agencies, banks, and Non-Banking Financial Companies between November 8 and December 31 last year in old notes, sources have told Moneycontrol.Tax officials are also scrutinizing people who paid advances to government agencies in old currency notes of Rs 500 and Rs 1000, which were devalued on November 8 as part of the government's efforts to crack down on black money. 

After the move was announced, many with undisclosed income tried to get rid of their old currency notes through any means possible. One route was to repay long pending dues to government agencies, banks and NBFCs.

“We are scrutinizing those accounts which had dues pending for a long time and then suddenly paid up in cash (between November 8 and December 31),” a source told Moneycontrol.

“In some cases, we got to know that account holders took money from others and repaid their loan to the banks,” the source said. “And these accounts holders are mainly small or medium-size real estate players and small firms.”

In such a scenario, the borrowers would have bought the old currency at a discount and used them to repay loans. In the process, they would have helped people with undisclosed wealth to launder their money.

The tax department has also gathered data from government agencies where accounts holders repaid loans.

The tax department has to complete scrutiny of 18 lakh accounts in 'Operation Clean Money' at the earliest so as to initiate action against them. These are accounts suspected of having undisclosed wealth.

The source said that not much time would be given to those being scrutinized to explain the source of their cash.