Taxmen may now track withdrawals under Rs 25,000

New Delhi, Oct 30 | Updated: Oct 31 2005, 05:47am hrs
Tax officials may snoop on those frequently withdrawing cash of slightly less than Rs 25,000 from non-savings accounts of banks on a single day as part of the governments efforts to keep track of black money generation.

The move is being mulled, as the tax department has received reports that some black money generators avoid giving any clue to the authorities by not falling under the net of Bank Cash Transaction Tax (BCTT) as they withdraw slightly less than Rs 25,000 from banks on a single day, sources said.

The department may investigate only those bank branches where the number of such transactions have shot up unexpectedly, the sources said.

Initially, the tax department has taken up 10 branches of banks in major cities for investigation and went through daily cash withdrawal of more than Rs 3 lakh from single non-savings account.

It may be noted that, BCTT is imposed on individuals for withdrawing Rs 25,000 or more in cash from non-savings bank account and on corporates for at least Rs 1 lakh withdrawal.

The tax, imposed in this years budget for the first time, is aimed at unearthing black money. Meanwhile, BCTT has already started yielding results with 10 parties involved in hawala business being nabbed for black money generation through large withdrawals of cash from banks.

The new tax has also enabled the tax department to trap seven parties involved in issuing bogus bills to dal and flour mills in Delhi to evade tax.

Three other parties, who have been nabbed, were helping traders from other parts of the country to convert their drafts into cash for wholesale purchases in Delhi.

Sources said, the tax department is still investigating the large amount of money that these parties regularly withdrew from banks and were collating information on the basis of tax they have paid on withdrawals of cash beyond Rs 25,000 on a single day from bank accounts other than savings.

The exact amount of bogus purchases by the mills were being quantified, the department said, adding one of the parties has confessed issuing bogus bills to 15 dal mills in Lawrance Road through just one account. The mills utilised these bogus bills to evade tax by inflating the purchases from them and they paid certain commission for issuance of such bills.