The noose tightens: How taxmen plan to investigate suspicious cash deposits

Individuals
1. Individuals are exempt from verification for deposits of up to Rs 2.5 lakh (other than minors). No verification required for deposits of Rs 5 lakh for those over the age of 70 years.
2. In case of cash receipts from exempt income such as agriculture, officials will verify these against earlier returns. They may also seek information on land holdings, etc.
3. I-T may seek bank statements to cross-check individuals' bank withdrawals.
4. Those claiming cash receipts from third party as 'gifts', may be asked to pay tax.
5. No need for additional information for those in business if cash holdings are lower than level at the end of March 2016.
Businesses
1. Assessing officer will verify if cash transactions are in line with normal practice by seeking data on monthly sales, stock register entries, bank statements.
2. Investigators will look at abnormal jump in cash sales during November-December 2016 and tally it with sales history.
3. More than one deposit of scrapped Rs 500 and Rs 1,000 notes closer to Dec 30 deadline may trigger attention
4. Non-availability of stock or attempts to inflate stocks by introducing fictitious purchases will also attract scrutiny.
5. Transfer of cash deposits to another entity or account which is not in line with earlier history may invite queries.