Depositing unaccounted money in other's account may invite up to 7 years jail


21 Jun 2013
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The Income Tax department has decided to slap charges under the newly enforced Benami Transactions Act against violators that carries a penalty, prosecution and rigorous jail term of a maximum of seven years.

Official sources said the department has detected over Rs. 200 crore in undisclosed income after it conducted over 80 surveys and about 30 searches in cases of suspicious usage of the scrapped currency. About Rs. 50 crore has been seized in these operations since November 8.

The sources said the the department has initiated a country-wide operation to identify suspect bank accounts where huge cash deposits have been made since November 8, the day the government demonetised Rs. 500 and Rs. 1,000 notes.

They said the Act empowers the taxman to confiscate and prosecute both the depositor and the person whose illegal money he or she has “adjusted” in their account.

“The CBDT has asked the Income Tax department to closely monitor all such transactions where people are using bank accounts of other persons for hiding and converting into white their black money using the old notes of Rs. 500 and Rs. 1,000. Already some instances have been reported in this regard and the department is set to issue notices under the Benami Act,” the sources told PTI.

Notices will be issued in cases of huge cash deposits beyond the threshold of Rs. 2.5 lakh. However, if a suspicious report is received from the bank or the Financial Intelligence Unit, even transactions below the Rs. 2.5 lakh threshold would also be investigated, they said.

“Such an arrangement where a person deposits old currency of Rs. 500 and Rs. 1,000 in the bank account of another person with an understanding that the account holder shall return his money in new currency, the transaction shall be regarded as Benami transaction under the said Act. The person who deposits old currency in the bank account shall be treated as beneficial owner and the person in whose bank account the old currency has been deposited shall be categorised under this law as a benamidar,” a senior official explained.

According to the Benami Act, the official said, that the ‘benamidar’, the beneficial owner, and any other person who abets or induces a benami transaction, shall be punishable with rigorous imprisonment for a period ranging from 1 year to 7 years.

“The benami amount in the bank account deposited post demonetisation will be seized and confiscated and the accused will also be liable to fine which extends up to 25 per cent of the fair market value of the benami property,” the official said.

Depositing unaccounted money in other's account may invite up to 7 years jail: The Hindu - Mobile edition
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