Operation Clean Money (OCM) enters Phase II: CBDT

Operation Clean Money (OCM) moves to Next Phase (i.e. OCM Phase II): CBDT

During First phase of “Operation Clean Money” (OCM), launched by Income Tax Deptt. on 31 Jan. 2017, about 17.92 lakh persons, whose cash transactions/ deposits during demonetization period (i.e. 9 Nov. to 30 Dec. 2016) didn’t match with their tax profile, were identified and requested for online e-verification of such transactions, based on advanced data analytics, causing minimum inconvenience to the taxpayers. About 9.46 Lakh persons responded and queries were raised in 35000 cases out of which online e-verification was completed in more than 7800 cases. Besides, it has been decided to close the verification in cases where explanation of source of cash was found to be justified or where the cash deposit has been declared under PMGKY.

As per CBDT, now the OCM has moved into Phase II with identification of more than 60,000 persons including 1300 high risk category persons for detailed investigations by the Income Tax Deptt. on grounds like businesses claiming cash sales as the source of cash deposits which is disproportionate to past profile/ industry norms, large cash deposits of Government or PSU employees, high value purchases of property, use of shell entities for layering of funds, no/ inadequate response to queries in OCM Phase I, etc.

Government has already taken extensive enforcement action including search and seizure (more than 2362 cases) and surveys  (more than 3400 cases) largely based on the information received post demonetisation during 9 Nov. 2016 to 28 Feb. 2017, leading to seizure of valuables worth more than Rs. 818 crore (including cash of Rs.622 crore) and detection of un-disclosed income of more than Rs. 9,334 crore. Also more than 400 cases have been referred to the Enforcement Directorate (ED)/ CBI by Income Tax Deptt.

The impact of Government action is already visible in the increase of 21.7 % in the returns of Income received in FY 2016-17, 16% growth in Gross Collection (the highest in the last five years), 14% Growth in Net Collection (the highest in last three years) and above 18%, 25% and 22% growth in Personal Income Tax, Regular Assessment Tax and Self-assessment Tax respectively.

The complete exercise of examining all the doubtful and non-tax compliant accounts may take more than one year but with the help of technology and continuous enforcement action all the liable accounts will be brought to tax.

Operation Clean Money (Phase II): CBDT Press Release dt. 14 Apr. 2017

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