Sharp rise in filing of returns

09/11/2017

On the first anniversary of Demonitisation, Income Tax Department has started issuing notices to 20,000 individuals and entities of Jammu and Kashmir, who deposited huge cash in the banks post demonetization. Even over 1500 cases of wrong deduction on interest paid on education loan have been picked up for detailed scrutiny and launch of prosecution. The department has decided to continue with its drive of widening the tax base in this State despite the fact that huge number of people has voluntarily started filing tax returns since November 8, 2016 when the demonetization of Rs 500 and Rs 1000 currency notes was announced by the Prime Minister Narendra Modi. The department is of the opinion that there are large number of individuals and traders, who are still outside the brackets of tax and they need to be made assessees either by way of generating awareness or through some strong action if need arises. Principal Commissioner of Income Tax J&K Circle, R N Sahay said that soon after the announcement regarding demonetization the Central Board of Direct Taxes (CBDT) launched 'Operation Clean Money' in order to verify the deposits made in the banks during the demonetization grace period.
As part of this operation, details of cash deposits were obtained directly by the CBDT from the banks and accordingly explanation on source of income on e-filing portal was sought from the individuals and entities. Though cases wherein verifications were received were handled at its own level by the CBDT, the cases where no response was received were referred to the respective circles of Income Tax Department. It is pertinent to mention here that notice under Section 142(1) is usually served to call upon documents and details from the tax payers and to take a particular case under assessment. The Principal Commissioner of Income Tax said, "most of these 20,000 cases pertain to businessmen of both the regions of Jammu and Kashmir", adding "we have been compelled to invoke Section 142(1) of the Income Tax Act as depositors in these cases chose not to respond to the relevant advisories of the CBDT". It is worthwhile to mention here that interest paid on the education loan can be claimed as deduction as per Section 80E of the Income Tax Act. The income tax benefit can only be claimed on interest part of the loan while as principal part doesn't quality for tax benefit.

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