The Income Tax department estimates that an astounding Rs. 3-4 lakh crore of tax evaded income, black money in common jargon, may have been deposited after demonetisation was announced on November 8 last year and Rs. 500 and 1000 currency notes were rendered illegal tender. The report comes in the wake of information that suggests 97% of the total money demonetised may have already found its way back to the banks’ coffers, raising question marks on the effectiveness of the move. The unaccounted income is being probed by the IT department to identify the offenders.
A senior official of the Income Tax department was quoted here stating,”We now have trunkloads of data, analysis of which shows that more than Rs. 2 lakh was deposited in over 60 lakh bank accounts post demonetisation. The total amount deposited in these accounts is more than Rs. 7.34 lakh crore.” The report went on to elaborate that more than Rs. 10,700 crore in cash is supposed to have been deposited in accounts in the entire Northeastern region besides the estimated Rs. 16,000 crore deposited in different accounts of the country’s cooperative banks. The official noted that the Enforcement Directorate was helping the IT department in identifying instances of tax fraud and tax evasion.
The bounty of cash continued even after the deadline for depositing old notes lapsed. It had come to light that Rs. 25,000 crore in cash was deposited in dormant bank accounts entirely in cash while nearly Rs. 80,000 crore of repayment of loans was also paid in cash. One of the stated objectives behind demonetisation was the elimination of black money, as stated by the PM Narendra Modi in his nationally-televised speech.
The official also stated that individual cash deposits of Rs 2 lakh to Rs 2.5 lakh per account, amounting to a total of Rs 42,000 crore, were found to have the same PAN and other details, indicating tax evasion and money laundering. These deposits will be looked at by the IT department and the ED, as will any abnormal deposits in the Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts. Any cash deposits of more than one lakh rupees in cash under these accounts would be scrutinised by the departments as well.
While the demonetisation move has been panned by critics and a united opposition, the government has beensteadfast in maintaining that the original three goals, eliminating terror financing, black money and counterfeit currency, have been achieved and that the move is a success. The jury on the matter is still out , however, as the Reserve Bank of India is yet to release official before-and-after figures.