Income Tax Department examining post Demonetisation Cases

The Central Board of Direct Taxes (CBDT)  provided a sense of direction to the field offices with regard to the areas of work to be focussed on till the relevant fiscal year’s Central Action Plan is finalised.

The field officers are now set to issue notices to 40,409 buyers and sellers who have under reported the ‘deeming’ income considered under the provisions of sections 50(C), 56(2)(7) and 56(2)(10) of the Income Tax Act, 1961. Of the total 16,082 cases detected by tax authorities.

The cases have been identified under the aegis of the Interim Action Plan of the Central Board of Direct Taxes (CBDT), which had asked I-T wings in major cities to dispose all cases related to demonetisation and issue notices on violations of high-value transaction norms under Section 285BA of the Income-tax Act.

The provisions of 285BA make it mandatory for banks, mutual funds, institutions issuing bonds, registrars and sub-registrar offices (SROs) to record and report high-value financial transactions that exceed ₹30 lakh in an Annual Information Report (AIR).

Income Tax officials have identified undisclosed income by way of capital gains from the sale of land and real estate in Mumbai worth ₹7,338 crore in the financial years 2016-17 and 2017-18, indicating that either the city’s Ready Reckoner (RR) rates are highly inflated or that there is a substantial presence of the cash component in property transactions resulting in the under reporting of actual deal values.

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