ACCOUNT MISUSE MAY LEAD TO SEVEN YEARS IN JAIL

NEW DELHI: Taxmen have warned people against depositing demonetised banknotes into the bank accounts of others. The tax department said anyone violating this rule will be charged under the newly enforced Benami Transactions Act that carries a penalty, prosecution and a rigorous jail term of a maximum seven years. Sources said the department has also initiated a nationwide operation to identify suspect bank accounts where huge cash deposits have been made post November 8 — the day the Centre recalled highvalue notes.

New Delhi: Warning people against depositing their unaccounted old currency in someone else’s bank account, the tax department has decided to slap charges under the newly enforced Benami Transactions Act against violators that carries a penalty, prosecution and rigorous jail term of a maximum seven years.

Official sources said the department has detected over ₹200 crore in undisclosed income after it conducted over 80 surveys and about 30 searches in cases of suspicious usage of the scrapped currency.

About ₹50 crore has also been seized in these operations since Nove mber 8 across states, they said.

Such instances where the suspicion is found to be true will be prosecuted under the Benami Property Transactions Act, 1988, applicable on both movable and immovable property, that has been enforced from November 1 this year.

The Act empowers the taxman to confiscate and prosecute both the depositor and the person whose illegal money was “adjusted” in their account.

“The CBDT has asked the Income Tax department to closely monitor all such transactions where people are using bank accounts of other persons for hiding and converting into white their black money using the old currency notes of ₹500 and ₹1,000.

“Already some instances have been reported in this regard and the department is set to issue notices under the Benami Act,” the sources told PTI.

Primarily, they said, the notices will be issued in cases of huge cash deposits beyond the threshold of ₹2.5 lakh but in case a suspicious report is received from the bank or the Financial Intelligence Unit, even deposits below this threshold will be investigated, the sources said.