Got an I-T notice on cash deposits? Don't panic and follow this guide

The Reserve Bank of India (RBI), in tandem with public sector and commercial banks, has undertaken data mining on a massive scale to identify how funds have been moved in the country after November 8. The government has come down hard on individuals and businesses operating doctored accounts, having deregistered and shut more than 100,000 companies and penalised more than 300,000 others. The I-T department has also identified over 37,000 shell or paper companies channelling black money through methods such as hawala. As a part of its Operation Clean Money, the I-T department identifies individuals whose income tax return filings are inconsistent with the amount of cash deposits made in their bank accounts during the demonetisation drive. It then sends a notification through SMS or e-mail, and the individual must provide a response on the department’s website for the same.

If you receive such a notice, do not panic or ignore it. First, verify that the PAN (Permanent Account Number) stated on the notice is yours. Since the I-T department issues notices to a specific PAN and not based on your name, there are chances that an erroneous notice may have been sent to you instead of someone else with the same name or birth date as yours. If you have received such a notice, irrespective of whether you have made the transactions or not, you must log into your account to submit a response. Here's how:

• Visit the income tax department website, https://incometaxindiaefiling.gov.in, and log into your e-filing account.

• Click on 'Cash Transactions, 2016' under the 'Compliance' tab. The page will then list all cash deposits made by you between November 9 and December 30, 2016. 

• Before you begin the verification process, make sure you have all pertaining documents such as receipts for cash income, past tax returns, etc. 

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