Raids in major cities against illegitimate old currency dealings

11 Nov 2016


The Income Tax department on Thursday conducted multiple raids in Delhi, Mumbai and other cities in the wake of reports of alleged profiteering and tax evasion by traders converting withdrawn currency notes in an illegal manner.

Interestingly, the operations or surveys began only in the evening as the tax authorities wanted some hard cash to accumulate at the illegitimate payment outlets to make the action effective.

Officials said operations are being carried out at least at four locations in the national capital including popular marketplaces like Karol Bagh, Dariba Kalan and Chandni Chowk, three locations in Mumbai and a few others in Chandigarh and Ludhiana.

Similar survey operations by I-T authorities are also understood to have been launched in two south Indian cities.

Sources said the department had received "actionable inputs" that some traders, jewellers, currency exchanges and hawala dealers were exploiting the recent currency demonetisation of Rs500 and Rs1,000 notes and were changing these currency notes at discounted prices.

Some retailers like chemists and petrol pumps have been exempted from the ban on the old notes, and some of these were reportedly indulging in rackets involving purchasing old notes at a discount.

They said the operations were planned after Central Board of Direct Taxes (CBDT) chairman Sushil Chandra on Wednesday asked all the investigation units in the country to keep a check on suspicious movement of huge cash and other illegal transactions leading to tax evasion.

Officials added that almost over 100 tax sleuths along with police officials have been roped in for the survey operations.

At few places, they said, some preliminary documents have been seized.

Finance minister Arun Jaitley has assured people that the taxman will not hound those making small deposits in scrapped Rs 500/1,000 currency, adding however that people with "large amounts of undisclosed monies will have to face the consequences under the tax laws".

Top I-T department officials had on Wednesday said the government's directive to them is "very clear" that any instance of tax evasion and black money should be dealt with strictly, especially after two opportunities in the form of one-time cash declaration window had been provided.

In a surprise move, Prime Minister Narendra Modi had on 8 November announced demonetisation of Rs500 and Rs1,000 notes and introduction of the new Rs500 and Rs2,000 ones with additional security features.


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