Tax department issues clarification, no questions will be asked on deposits up to Rs 2.5 lakh

The Income Tax (I-T) Department clarified there will be no questions about deposits of up to Rs 2.5 lakh.

The tax officials said those accounts will be probed that do not match the tax returns.

The department is going tech-savvy and will use Big Data analytics to segregated different kinds of deposits and large ones like more than Rs 1 crore that do not match with income tax returns filed in previous years will be taken for "layer enforcement".

"There is no need to fear for any genuine person. We will ensure there is no harassment to genuine person," said Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra.

The department, he said, has accumulated a large data on deposits made in banks after the government banned old Rs 500 and Rs 1000 notes on November 8.

"We found (and segregated) the data (for deposits) between Rs 2 lakh and Rs 80 lakh and Rs 80 lakh and above. As the Prime Minister has clearly said that (for deposits) up to Rs 2.5 lakh we will not ask (questions), so we have put that data aside at the moment," he said.

The tax department has used its data bank to run all deposits exceeding Rs 5 lakh made during the 50-day window provided post demonetisation to get rid of junked notes, he said.

Giving examples, he said deposits of Rs 3 lakh are "justified" if a person has an annual taxable income of Rs 10 lakh and the tax department will "not touch" him.