On Monday, March 20, the Government of India told the Lok Sabha that the Income Tax department has seized total assets worth Rs 8832.92 crores in the search and seizure action conducted by it in the last eight financial years, i.e from 2014-2015 to 2021-2022.
Pankaj Chaudhary, the state minister for finance, made the statement in Parliament while responding to queries from Dr Vishnu Prasad M.K and T.R.V.S Ramesh.
“Whenever any instance of unaccounted/black money comes to notice, the Income Tax department takes appropriate actions as per the provisions of the Income-Tax Act, 1961. Such actions include conducting searches and surveys, assessment of income, levy of tax, imposition of penalty, launching of prosecution, etc,” the government told the LS on Monday.
The state minister for finance further asserted that tax demand of a total of Rs 13,566 crore has been raised under the Black Money Act in the last four financial years, starting from 2018-19. The demand was raised in 349 cases since the law was enacted in 2015.
Further, the minister said that 648 disclosures involving undisclosed foreign assets worth Rs 4146 crores were made in the one-time three months compliance window, which closed on 30th September 2015, under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The amount collected by way of tax and penalty in such cases was about Rs 2476 crore.
Positive impact of demonetisation on the level of tax compliance in the country: Govt in Lok Sabha
Another question raised in the Lower House on Monday was if demonetisation, announced by the Modi government on 8 November 2016, had assisted the government in identifying unaccounted money in the country, as well as the quantity and information of those having an unaccounted income.
In a reply to the aforementioned question, Pankaj Chaudhary, the state minister for finance, said that from November 2016 to March 2017, the Income-tax Department conducted search and seizure operations in 900 groups, resulting in the seizure of Rs 900 crores, including Rs 636 crores in cash and admission of undisclosed income of about Rs 7961 crores.
The government further stated that the increase in net direct tax revenues of 18% in the fiscal year 2017-18 over the fiscal year 2016-17, the greatest in the previous seven fiscal years, demonstrated the positive impact of demonetisation on the level of tax compliance in the country.
The fact that the Personal Income-tax (PIT) Advance Tax collections increased by 23.4% and PIT Self-Assessment Tax collections increased by 29.2% in FY 2017-18 compared to FY 2016-17, corroborated the assertion that demonetisation and the subsequent use of bank deposit data by the Income Tax Department had a significant impact on voluntary tax payments by non-corporate / individual taxpayers, said the state minister for finance.
He further revealed that for the fiscal year 2017-18, the number of Income Tax Returns (ITRs) filed with the Income-tax Department increased by 25%. It was the highest rate in the previous five years.
Further, during the fiscal year 2017-18, the number of returns submitted by corporate taxpayers increased by 17.2%. It was more than five times the growth rate of 3% in the fiscal year 2016-17 and 3.5% in the fiscal year 2015-16, Chaudhary confirmed.
Regarding the investigations conducted by the Directorate of Enforcement (ED) under the Prevention of Money Laundering Act, 2002 (PMLA) and Foreign Exchange Management Act, 1999 (FEMA), the minister stated that a number of cases under PMLA were recorded during the period of demonetisation and thereafter, relating to the acquisition of unaccounted demonetized currencies. FEMA cases have also been investigated in which cross-border transactions/forex transactions were observed.
Under the PMLA, investigations have been launched in eight cases in which 107 people were discovered to be involved in the generation, acquisition, and/or projection of undeclared money. In these cases, criminal proceeds totalling Rs 191.68 crores have been attached/seized, and 05 accused have been arrested. In these cases, 13 Prosecution Complaints (PCs) and 07 Supplemental PCs have been filed, he said.
Similarly, under FEMA regulations, investigations have been launched in 10 cases against 19 people, with currency totalling Rs 2.99 crores seized. Furthermore, eight Show Cause Notices were issued, with 05 of them being adjudicated. During the adjudication, a penalty of Rs 1.61 crores was levied. Furthermore, seized currency totalling Rs 77.81 lakhs has been ordered to be confiscated throughout the adjudication process.
No instructions have been given to banks for not filling Rs 2000 notes in ATMs
Replying to a question on whether the Reserve Bank of India (RBI) has put restrictions on banks to disburse currency notes of Rs. 2000 denomination through ATMs, Union Finance Minister Nirmala Sitharaman said in the Parliament on Monday that the government has not issued any instructions to banks on whether to load ATMs with Rs 2000 notes or not.
“No instructions have been given to banks for not filling Rs 2000 notes in Automated Teller Machines (ATMs). Banks make their own assessment of the amount and denominational requirements for ATMs on the basis of past usage, consumer requirement, seasonal trend, etc,” said Nirmala Sitharaman told the Lok Sabha.
She further stated, citing RBI annual reports, that the indent for the supply of Rs 2000 denomination banknotes has not been placed from 2019-20 onwards. Following the demonetisation of the old Rs 500 notes and Rs 1,000 bills in 2016, the government and RBI introduced Rs 2,000 notes into the system.
No such information or data is available. As per the Annual Reports of the Reserve Bank of India (RBI), the total value of Rs 500 and Rs 2000 denomination banknotes in circulation as of end-March 2017 and as of end-March 2022 was Rs 9.512 lakh crore and Rs 27.057 lakh crore.
