I-T department scrutnising frozen demat accounts having balance in excess of 10 lakh as on December 2008

More than 6,300 frozen demat accounts are now finding some claimants, giving new leads to the Income Tax department’s probe in the matter pertaining to Rs 6,700 crore of unclaimed stocks. A number of accounts were lying idle since 2007 and no transactions were being carried out in them for almost two years. A number of such accounts have now been claimed which the department is scrutinising, official sources said.

The I-T department has found monetary links of these frozen demat accounts to various other bank accounts and investment avenues like share markets, official sources said. Sources said the department is also verifying the veracity of the account holders who have made claims now.

The department is investigating into 6,385 frozen demat accounts, which had balances in excess of Rs 10 lakh as on December 2008.

Demat accounts are required for trading in the stock exchanges. Without a demat account no trading can be done.

The I-T department earlier had asked it’s Chief Commissioners of Income Tax (CCITs) to serve notices to all the account holders and report unclaimed accounts so that such accounts can be seized.

The respective I-T Commissioners are now preparing ‘detailed reports’ on the transactions of these accounts.

The I-T department with the help of unique PAN had also tracked down a number of shareholders of these accounts.

In certain cases it was found that the account holder had died and some had changed addresses without informing the assessing officers of the department.

The probe earlier had found few thousand investors were receiving money in the form of allotment of shares in IPOs.

These accounts were frozen by the two depositories, National Securities Depository Ltd and Central Securities Depository Services Ltd, on January 1, 2007, after investors failed to comply with the government’s directive to furnish details of their Permanent Account Number while transacting in the financial markets.

Securities in the frozen accounts consist mostly shares from primary and secondary markets.

After the 2006 IPO scam, stock market regulator Securities and Exchange Board of India had made it mandatory for depository participants, and later investors, to quote PAN for operating demat accounts.

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