The second phase of the ‘Operation Clean Money’ (OCM) launched to unearth black money, the Income Tax department will probe over 60,000 individuals including 1,300 high risk persons for alleged excessive cash sales post demonetisation

Operation Clean Money (OCM)

• It was Launched by the Income Tax Department (CBDT) for e-verification of large cash deposits made during the period from 9^th November to 30^th December, 2016.
• The programme was launched on 31^st January, 2017.
• As part of the initiative, Email and SMS were sent to 18 lakh taxpayers for submitting online response on the e-filing portal.
• The operation is primarily aimed to verify cash transaction status (exchange/savings of banned notes) of tax payers during the demonetisation period.

First Phase

• Operation Clean Money involved e-verification   of cash deposits made in the banks.
• The entire phase was conducted online, wherein 17.92 lakh persons 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.
• Cash deposit has been declared under Pradhan Mantri Garib Kalyan Yojna (PMGKY), the verifications would also be closed.

Second Phase

• OCM involves identification of high risk persons 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 employees.
• Persons who have undertaken high value purchases, persons who have used shell entities for layering of funds and where no responses were received.

Source : The Hindu, pib

GS III :  Money-laundering and its prevention