Received gifts over Rs 20K? Inform Income Tax department by February 15

In an FAQ to clear the doubts over replying to SMS or e-mail queries received with regard to suspicious deposits made post note ban, the tax department said assessees should give “explanations” of the source of cash. 

If the cash deposited is from multiple sources or arises from cash in hand as on November 8, the assessee while replying on the e-filing portal will have to give segregated details - cash withdrawn from bank, cash received from identifiable persons with or without PAN, cash received from unidentifiable persons and cash out of earlier income or savings.

The assessee can also report how much he has deposited or will deposit under the PMGKY scheme, in which he can pay 50 per cent tax and penalty and come clean.

“The taxpayer is advised to provide the details of identifiable person (with PAN) to reduce the chances of the case being selected for verification. In case of cash receipts of Rs 20,000 or more from a single person, it is expected that the details are provided...,” the I-T department said.

It said cash received by people exempt from taxes like farm income can be shown under the head ‘cash receipts exempt from tax’, only if they are not involved in business.