Friday 17 February 2017

How to Respond IT Notice on Cash Txn during Demonetization

Did you receive an email or SMS from the Income-tax Department (ITD) recently? The ITD has started contacting those individuals whose bank accounts have witnessed transactions related to cash deposits between November 9 and December 30, 2016. If you haven't yet been contacted by the ITD, you can voluntarily check too. This communication, however, need not be construed as an I-T notice. 

Submit your response online (Last Date is 15th February, 2017)

Instead of visiting the I-T office, the taxpayers can submit online explanations by logging on to the e-filing website ( ) using one's credentials. Even if you have missed the deadline of 15/02/2017 still you can respond as it is better to be late than never.

If you haven't registered yet, do so by clicking on the 'Register Yourself' link. Registered taxpayers should verify and update their email address and mobile number on the e-filing portal to receive electronic communication. Some cases will be selected for verification based on risk criteria. If a case is selected for verification, the request for additional information and its response can also be communicated digitally by the ITD and the taxpayer respectively. 

Again, the response of the taxpayer will be assessed against available information and in case the explanation for the source of cash is found to be justified, the verification will be closed without any need to visit the I-T office. 

Where to look for cash transactions details 

Once logged in, the Permanent Account Number (PAN) holder can view the information using the link "Cash Transactions 2016" under "Compliance" section (at the top panel) of the portal.  

The details of transactions related to cash deposits between November 9 and December 30, 2016 will be displayed, showing bank name, account number and amount. 

How to Respons 
The taxpayer can respond in two steps. First, the taxpayer needs to confirm that the bank account relates to his PAN. Further details are required to be provided in the second step only if the taxpayer confirms that the account relates to him. 

Confirming the bank account 

The user has two options: 

The account does not relate to this PAN: 

If the user selects this response then "Your feedback will be sent to the information source for confirmation" will be displayed. On clicking the submit button, the success message along with the transaction ID is displayed on the screen. 

The account relates to this PAN: 

If the user selects this then the screen showing transaction details will be displayed to the user. 

Here, you can see: Cash deposit in the account between November 9 and December 30, 2016 (as reported) - Rs X 

The row below will show: Cash deposit in the account between November and December 30, 2016 (as confirmed by you) - Rs Y 

You can even modify the actual amount deposited, i.e., as confirmed by you.

At this stage, you will have to provide the explanation for the transaction. The screen helps you identify one: 

*Cash out of earlier income or savings     *Cash out of receipts exempt from tax 
*Cash withdrawn out of bank account       *Cash received from identifiable persons (with PAN) 
*Cash received from identifiable persons (without PAN) *Cash received from unidentifiable persons *Cash disclosed/to be disclosed under PMGKY 

If you have any doubts and hesitating from providing the true information to tax authorities, our experts as Samadhan Kender will explain you and help you to submit your response to get rid of the IT Notice. But you have to legally prove the source of cash deposited in your account wef 09/11/2016 to 31/12/2016.

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