The income tax department of India has found many benami cases of Rs. 50 lakhs and above in the small savings schemes such as National Savings Certificate and Kisan Vikas Patra made in the names of house-maid and minor children.
Some officials told a media portal how the income tax department has been sending out notices to people who have deposits of over 1 crore Rs and more.
The central government has asked the post offices to restart the Know Your Customer – KYC process for all the present accounts with deposits of Rs 10 lakhs or more. After the KYC processes are completed, these accounts will be categorized into low-risk, high-risk, and very high-risk.
Till now, more than 150 notices of deposits of more than 1 crore Rs are sent to the respective individuals. The move came after the income tax department found out about many benami cases where deposits of above Rs 50 lakhs were made but no income tax returns filing were made.
The number of such cases has been more and more such notices will be released. The income tax department is making use of data analytics to identify such cases.
One of the income tax department officials cited that the compliance rules for small savings schemes are simpler and this has been misused by the NRIs (non-resident Indians) and high net-worth individuals (HNIs). Even some trusts have been a part of this act. Presently, Hindu Undivided Families – HUFs and NRIs have been restricted from investing in small savings schemes.
In a circular released on 25 May 2023, the Department of Posts – DoP ordered post offices to flag and freeze accounts if customers don’t agree to share their KYC details.
The income tax department has detected the use of fake addresses, PAN, and Aadhaar for opening small savings schemes. Also, it has been found that deposits made in some accounts are much higher than the real income of such account holders.
The department has also asked post offices to ask customers to show income proof for all fresh deposits of Rs 10 lakhs and above. It has also given the authority to post offices to freeze such accounts if the customers don’t give proper reasons to explain the sources of their income. However, it has also asked the post offices not to chase the customers and make the account holders wary.
It has been noticed that the move came after the central government recently made reporting rules more strict for all investments in post offices under the Prevention of Money Laundering Act – PMLA rules.
For customers who are post office account holders, this news may come as a surprise because they will have to do their KYC procedure again at the earliest. If you are having a saving account or are a part of small savings schemes in the Post office, please visit your post office branch and stay updated with the latest rules and regulations in order to keep your account safe and secure.