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Income Tax department launches ‘Operation Clean Money-II’ to probe 60,000 people

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On April 14, 2017, the Income Tax department launched second phase of ‘Operation Clean Money’ under which it will probe over 60000 individuals including 1300 ‘high risk’ individuals.

Background Information:

The Income Tax Department had carried out first phase of ‘Operation Clean Money’ from January 31, 2017 to February 15, 2017, under which it conducted e-verification of large cash deposits made during the demonetisation window from November 9, 2016 to December 30, 2016.

  • The threshold for e-verification was cash transactions of Rs. 5 lakh and above. As a result, nearly 18 lakh individuals were identified who undertook cash transactions which were not in line with their Income Tax Returns.
  • Such individuals were asked to provide justification for their transactions through an online portal enabled by Income Tax Department (ITD) within 10 days. All such cases where the source of cash declared was proper or cash deposit was declared under Pradhan Mantri Garib Kalyan Yojna (PMGKY) were closed.

Target Group for ‘Operation Clean Money’ – II:

Businesses such as petrol pumps, hospitals and other essential services which have deposited much higher amount of cash during note ban period as compared to the previous period.

  • Central and State Govt. employees including PSU employees who made large cash deposits.
  • High Value Purchasers.
  • Those who laundered money through shell companies
  • Individuals who did not respond to ITD queries under the first phase of Operation Clean Money.
  • Senior officials of ITD have mentioned that in this phase the identification was not based on any particular threshold transaction amount. Detailed investigation will be conducted for around 6000 high value property transactions and 6600 cases of outward remittances.

Similar to the first phase, the identification was done with the help of advanced data analytics which included relationship clustering, money trail and integration of data sources.

Effects of Govt. Action:

Govt. action to uncover black money has yielded positive results. Returns of income received for FY 2016-17 have increased by 21.7%. Officials also believe that these operations will help in widening the tax base.