Non-resident Indians (NRIs), exchanging old Rs 500 and Rs 1,000 notes, have now come under the income-tax (I-T) department’s scanner as the authorities suspect them of exchanging notes for citizens here.
According to sources, the Central Economic Intelligence Bureau (CEIB), a nodal agency for economic intelligence, shared data of old currency seizures with the I-T department of over Rs 500 crore, made in Maharashtra, Tamil Nadu, West Bengal and Gujarat. These seizures were made after March 31, which was the deadline for NRIs to exchange old notes with the Reserve Bank of India (RBI), while for resident Indians it was till December 30, 2016.
The deadline for NRIs was extended to June 30 with a rider that each person can exchange a maximum of Rs 25,000.
Tax authorities suspect the seized old notes are being hoarded by money operators, which are being exchanged by NRIs.
Acting on the information provided, the tax department has sought some data of NRIs from the Reserve Bank of India (RBI), who have so far exchanged demonetised notes, said a source in the know.
“It is premature to say that these old notes belong to NRIs as we are still probing the matter. The recovery of old notes, however, indicates the involvement of money operators, who were hoarding the money,” said a senior tax official.
“We are questioning the people who were caught by the economic offence wing to establish links. However, it is complicated as there are several intermediaries involved in the receiving and exchanging of old notes,” he added.
Sources said that over the past one month, many linked persons have been asked to appear before I-T and Enforcement Directorate officials to explain their source of funds.
Tax officials believe that the reported seizures are not even one per cent of the total old notes which are still out of reach. They estimate that Rs 70,000 crore of old notes are still out of the banking system.
Neither the government nor the RBI has disclosed the amount of old notes that have come into the banking system.
The CEIB has registered the case under sections 5, 7 of Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016, which makes holding, transferring or receiving old notes a criminal offence.
The CEIB, while referring the case to the tax department, made a strong remark saying that the cases required stringent action and asked tax authorities to share the investigation report with them.