CA Haresh Kataria
The online verification of cash deposits during demonetization has been enabled on the e-filing portal (for taxpayers) which will be synchronized with the internal verification portal of Income Tax Department (ITD).
Data analytics will be used to select cases for verification, based on approved risk criteria. If the case is selected for verification, request for additional information and its response will also be communicated electronically.
It may be noted that the information on the online portal will be dynamic getting updated on receipt of new information, response and data analytics.
The response of taxpayer will be assessed against the available information. In case explanation of source of cash is found justified, the verification will be closed without any need to visit the Income Tax Office. The verification will also be closed if cash deposit is declared under Pradhan Mantri Garib Kalyan Yojna (PMGKY).
The Income Tax Department has published a User Guide for assisting the tax payer in submitting online response for transactions related to cash deposits during the demonetization period.
A brief summary of the User Guide is as under :
The User Guide states that Cash transaction data is only shown in cases where it does not appear to be in line with the taxpayer profile.
Viewing information
The information relating to cash deposits is displayed in the PAN holders account in the e-filing portal (after log in) under the “Compliance” section under the title “Cash Transactions 2016”.
The information of cash deposits is displayed as under
Account Details
A.1 Bank / Institution
A.2 Branch / IFSC Code
A.3 Account Number
A.4 Cash Deposit in the account between 9th Nov2016 and
30th Dec 2016 (as reported)
A.5 Cash Deposit in the account between 9th Nov2016 and
30th Dec 2016 (as confirmed)
Submission of response
Confirmation of account
- In the first step the taxpayer is provided with two options i.e “The account relates to this PAN” and “The account does not relate to this PAN”.
- Further details are required to be provided only in the second step if the taxpayer confirms that the account relates to the taxpayer.
- If the taxpayer selects the option “The account does not relate to this PAN” then the message “your feedback will be sent to the information source for confirmation” will be displayed. On clicking the submit button, the success message alongwith the transaction ID is displayed on the screen.
Explanation of cash deposit
- If the taxpayer selects the option “The account relates to this PAN” the screen for capturing details will be displayed to the user.
- At this stage the taxpayer will be able to modify the value of cash deposit, if it is different from the displayed value.
- The taxpayer then has to provide the explanation of the transaction (source of cash deposit) digitally without visiting the Income tax office.
Various categories for providing explanation are :
- Source of Cash Deposit
B.1 Cash out of income or savings- Amount + Remarks
B.2 Cash out of receipts exempt from tax-Amount + Remarks
B.3 Cash withdrawn out of bank account-Account wise list
B.4 Cash received from identifiable persons (with PAN)-PAN wise list
B.5 Cash received from identifiable persons (without PAN)-Person wise list
B.6 Cash received from unidentifiable persons-Nature of transaction wise list
B.7 Cash Disclosed/to be disclosed under PMGKY-Amount + Remarks
B.8 Balance (A.5-B.1, B.2, B.3,B.4,B.5)-Computed
Important aspects regarding submission of response
1. If the cash deposit under A.4 is not correct please mention the correct amount under A.5.
The Income Tax Department (ITD) intends to refer such cases to the information source for confirmation.
2. The sum of all sources of cash deposits (B.1 to B.7) should match with the confirmed cash deposit amount (A.5) such that the balance (B.8) is computed as 0.
3. Cash received from other persons
If cash is received from other persons (on account of cash sales, loan, gift, donation etc.), it should be mentioned under B.4, B.5 or B.6 as the case may be. The nature of cash transaction can be mentioned while providing the details.
4. If cash is claimed to be from more than one category (or out of cash in hand), the source of cash may be assigned under various categories in the following sequence (Adopting other sequence may result in case being selected based on risk criteria).
a) Cash withdrawn out of bank account (B.3
b) Cash received from identifiable persons with PAN (B.4)
c) Cash received from identifiable persons without PAN(B.5)
d) Cash received from unidentifiable persons without PAN (B.6)
e) Cash out of receipts exempt from tax (B.2)
f) Cash out of income or savings (B.1)
g) Cash Disclosed/to be disclosed under PMGKY (B.7)
6. If cash deposited is claimed to be, out of the receipts exempt from tax (B.2) or out of earlier income or savings (B.1), is not in line with the taxpayer profile or other information available, he case may be selected for verification based on risk criteria.
7. The user guide requires the taxpayer to suo moto submit the details of other bank accounts (other than the one displayed) in which specified bank notes (SBN) has been deposited and provide the explanation of the said deposits
Uploading lists using CSV
A facility has been provided to enable upload of CSV ( Comma Separated Values) files in following categories
B.3 Cash withdrawn out of bank account
B.4 Cash received from identifiable persons (with PAN)
B.5 Cash received from identifiable persons (without PAN)
B.6 Cash received from unidentifiable persons
The taxpayer has to download the respective template and upload the same after entering the data required as per the template.
Data format for Cash withdrawn out of bank account (B.3)
Account wise list
| Bank/Institution | IFSC Code | Account Number | Amount Withdrawn | Remarks |
Data format for Cash received from identifiable person with PAN (B.4)
Person wise list
| PAN of person | Name of person | Nature of transaction | Amount received | Remarks |
Data format for Cash received from identifiable person without PAN (B.5)
Person wise list
| Name of person | Address of person | Pin Code | Nature of transaction | Amount received | Remarks |
Data format for Cash received from un-identifiable person without PAN (B.6)
Nature of Transaction wise list
| Nature of transaction | Amount received | Remarks |
In the CSV Template the “Nature of Transaction” should be entered as per the codes mentioned below :
| Drop down | Code to be specified in CSV (case sensitive) |
| Cash Sales | RS |
| Loan received in Cash | RL |
| Loan repayment in Cash | RR |
| Gift received in Cash | RG |
| Donation received in Cash | RD |
| Other Cash Receipt |
RO |
Reference to SBNs is found in the User Guide but not in the interface created for assessee’s response.
While the emphasis should have been on SBNs deposited between 9th Nov2016 and 30th Dec 2016, and there is in fact reference to SBNs, the amounts shown against the PANs however reflect all cash deposited and not just the SBNs.
There seems to be no due date/deadline for compliance.
How to report in the following scenario?
I have cash receipts from multiple persons and made cash payment to multiple person over the period of time and remaining balance lying in cash box at the end of 08.11.2016 have been deposited in bank in subsequent days.
How to map closing balance as on 08.11.2016 which I have deposited with particular source?