Under the Operation Clean Money (OCM), more than 60,000 persons, including 1,300 high risk persons, have been identified for investigation into claims of excessive cash sales during the demonetisation period.
What is Operation Clean Money – (OCM)
The Income Tax Department (ITD) launched Operation Clean Money (OCM) on 31st January 2017 to leverage technology for e-verification of cash deposits made during the demonetization period i.e. 9th November to 30th December 2016.
It is a unique operation being conducted by the Income-tax Department (ITD) through use of advanced data analytics allowing for optimization of government resources and causing minimum inconvenience to the taxpayers.
The First Phase of Operation Clean Money involved e-verification of cash deposits made in the banks. The entire phase was conducted online, wherein 17.92 lakh persons, who entered into cash transactions that didnot appear to be in line with their tax profile, were identified and requested for on-line responses on such transactions. 9.46 Lakh persons responded on pre-defined parameters of sources of the cash deposits.
Online queries were raised in 35,000 cases and on-line verification was completed in more than 7,800 cases. It has been decided to close the verification in cases where explanation of source of cash was found to be justified. In cases where the cash deposit has been declared under Pradhan Mantri Garib Kalyan Yojna (PMGKY), the verifications would also be closed.
The operation has now moved into the Second Phase with identification of high risk persons for detailed investigations by the Income Tax Department. The identification has been done through use of advanced data analytics, including integration of data sources, relationship clustering and fund tracking.
The high risk categories identified include businesses claiming cash sales as the source of cash deposits which is found to be excessive compared to their past profile or industry norms; large cash deposits made by government or Public Sector Undertaking (PSU) employees; persons who have undertaken high value purchases; persons who have used shell entities for layering of funds; and where no responses were received.
One of the stated objectives of demonetisation was ‘elimination of Black Money that casts a long shadow of parallel economy on our real economy’. The OCM and the subsequent enforcement actions being undertaken by the ITD shall continue to achieve the goal set out by the Government.
The opportunities created by demonetization is being used by the ITD for widening and deepening of the tax base and create deterrence, not seen before, and to curb generation of black money in the Indian economy. 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.
More than 6,000 transactions of high value property purchase and 6,600 cases of outward remittances shall be subjected to detailed investigations under OCM. All the cases where no response is received shall also be subjected to detailed enquiries.
Extensive enforcement action by the Income Tax Department (ITD) has led to seizures worth over Rs 818 crore and detection of undisclosed income of over Rs 9,334 crore
Impact of Operation Clean Money (OCM)
- Increase of 21.7% in the Income Tax Returns for FY 2016-17;
- 16% increase in Gross Collection;
- 14% growth in Net Collection;
- 18%, growth in Personal Income Tax,
- 25% growth in Regular Assessment Tax
- 22% growth in Self Assessment Tax respectively