Is It Legal To Deposit Money In Someone Else's Account Ti Avoid Levy

After the demonetisation, the banks are instructed to levy charges on greenbacks transactions higher up a certain limit. Further, RBI has made information technology mandatory to investigate unusual greenbacks transactions. This is because a lot of malpractices were noticed when cash deposits of Rs. 500 and Rs. 1,000 notes were made during the demonetisation period. A circular was passed past the Finance Ministry building describing the standard operating procedure, for assessing officers, to be followed while handling such cases. There are specific cases when a verification warrant may exist issued for your transaction:

What are Suspicious Transactions?

Banks and other financial intermediaries with the Financial Intelligence Unit of measurement of the government file the suspicious transaction reports.

Usually, all series of cash transactions that are related to each other which value individually less than Rs 10 lakh and have occurred in less than a month and sums to a monthly aggregate that exceeds Rs 10 lakh is considered suspicious. However, this is non the only example of a suspicious bank transaction. Reporting entities tin report and raise suspicion on the basis of other grounds also.

How do Banks View Probable Transactions of Suspicious Nature?

Value of transactions: Value when merely below the reporting threshold amount can exist an obvious attempt to avoid reporting. When the value is inconsistent in line with the client's apparent fiscal standing.

Multiple accounts: Several accounts with a common introducer, business relationship holder, or an authorized signatory with no rationale. Unexplained transfers between multiple accounts without a rationale.

Action in accounts: Unusual activity has been recorded when compared to by transactions. Sudden action has been seen in dormant accounts.

Client identity: Identification documents that could not be verified within a reasonable timeframe. On the ground of false identification documents. Accounts are opened with names that are similar to other established business entities.

Nature of transactions: Unjustified and are of unusual complication. Recurrent purchase of drafts/other negotiable instruments via greenbacks. The nature of transactions is inconsistent when compared to what has been expected from the declared business.

Who Tin can Be Put Nether Scrutiny?

At that place can be many scenarios that phone call for scrutiny. Some of the scenarios are mentioned below:

Cash deposited from earlier income or savings
- Individuals who deposit cash in a higher place Rs.two.v lakh and senior citizens who deposit greenbacks higher up Rs.5 lakh may be scrutinised. Whatsoever corporeality within the specified limit will exist excluded from scrutiny considering that the money is from household savings, cash withdrawals, before income, and so on.
- In the case of individuals without concern income, deposits above the mentioned limits will be verified by the assessing officers. Businesses whose books of accounts showing full savings that are more the endmost greenbacks residuum every bit of 31 March 2016 (AY 2016-17) will be investigated.
- Banking company accounts that are suspected of existence misused for money laundering or revenue enhancement evasion or entry operations in shell companies will exist completely investigated.
Cash from taxation-exempt receipts Any excess cash out of receipts that are exempt from the taxation should be in line with the income revenue enhancement returns filed earlier by the aforementioned person. In a case where it is otherwise, the assessing officeholder may call for relevant information.
Greenbacks withdrawn from a bank account greenbacks deposits that don't friction match the individual's bank statements phone call for suspicion fifty-fifty if he says the money was withdrawn from the bank account. The assessing officer may seek a copy of the banking company statement to explicate the cash deposits and withdrawals out of the bank account.
Cash received from identifiable persons In the case of cash received from identifiable persons (with PAN), the assessing officeholder volition non call for further information from the taxpayer. Instead, the assessing officer will seek data from the assessing officer of such an identifiable such identifiable person. In the case of a souvenir, the assessing officer would verify whether the same is taxable in the hands of the recipient nether section 56(2) of the income tax law.
Cash received from unidentified people In the case receipts from unidentifiable persons (without PAN), the assessing officer will verify whether the cash receipts are in line with the normal practices of the business of the taxpayer. If greenbacks transactions are not in line with the normal practices of business concern, the assessing officeholder may ask you to submit documents, such every bit monthly sales summary and stock registers, for verification. In the instance of other unidentifiable persons, the assessing officer volition verify whether the cash transactions are in line with the normal business practices in accordance with the earlier return of income. The assessing officeholder may seek information such as monthly sales summary, relevant stock register entries, bank argument etc to pinpoint instances of backdating of sales or fictitious sales. To identify instances of backdating of sales, an AO may look into:
- An abnormal increase in the percentage of cash sales during the menstruation of Nov-December 2016 or earlier periods.
- Multiple deposits of demonetised currency late in Dec 2016.
- Non-availability of stocks or attempts to inflate stocks.
- Transfer of banking concern accounts that are not used previously.
- The same process will be used for verification of donations and other greenbacks receipts.
Cash disclosed or to be disclosed under PMGKY In the instance taxpayer discloses cash nether Pradhan Mantri Garib Kalyan Yojana (PMGKY), the suspected cash transactions can exist verified with disclosures made under PMGKY.

How Much Money Tin can You Transfer Without Raising Suspicion?

An individual who deposits cash above Rs.2.5 lakh; a senior citizen who deposits cash above Rs. 5 lakh may be scrutinised. An amount within the prescribed limit will not be scrutinised considering that the money is via household savings, earlier income, greenbacks withdrawals, and so on.

How Does the eastward-Verification Process Work?

The online verification has been enabled on the due east-filing portal which will be synchronised with the internal verification portal of the income revenue enhancement department. The features of the portal are listed below:People nether scrutiny tin submit explanations online through their login on the e-filing portal. They do not need to visit the income tax office. PAN holders tin can view this information using the 'Cash Transactions 2016' under the 'Compliances' section.

An SMS and email will be sent to all persons under scrutiny directing them to submit online responses on the e-filing portal. Such persons who are non registered should annals immediately under 'Annals yourself' link. Registered taxpayers must update their e-mail accost and mobile number on the portal are accurate to receive communication from the department.

Individuals can check the guides and FAQs department of the IT department's website to submit their responses.

Low-risk cases tin be airtight centrally, while the other cases will be assigned to AOs for verification.

AOs will view all submissions and ask to submit further verification proofs online. The supporting documents must be submitted online.

If the documents and proofs submitted online are satisfactory, the AO will close the verification online.

What to do if You Are Stuck in the Process?

If you have any sort of questions or queries during the process, you tin find guidance by referring to the 'Help' department of the e-filing portal. You lot can also refer to the FAQs to notice a solution for your queries. Alternatively, you can refer to a document titled 'Cash Transactions 2016 User Guide'. You lot can also learn from the 'User Guide on Verification of Cash Transactions on ITBA-AIMS module', a guidelines document AOs abide past during verification.

Closure and Approval

Assessing officers have the freedom to close a person'southward records after verification with due permission from the concerning regime. The relevant authority for tier-i cities is Additional/Joint CIT heading the range for transactions beneath Rs.10 lakh. For other cities, the AO needs to refer to the Pr. CIT.

Not-compliance and Penalty

In the case of not-compliance, the AO can view the ITS contour of the PAN holders, do powers under Section 133(half dozen) with the blessing of the prescribing authority, survey action under Section 133A, and more. On the other paw, the AO tin consider initiating penal proceedings under section 269SS or 269T of the Act.