The income tax service will likely target those who pay cash in hospitals or party halls

In an effort to detect cash transactions and possible tax evasion, the tax department would have set its sights on hospitals (as many do not collect patients’ PANs), banquet halls and certain professionals/businesses.

According to the Department of Income Tax, some cash transactions can get you in trouble. For example, accepting Rs 20,000 or more in cash for a loan or deposit is prohibited. Further, a person is also not permitted to receive an amount of Rs 2 lakh or more in cash in total from another person in a day/in a single transaction/in connection with transactions relating to a single event /opportunity. It was only for a brief period in April-May 2021 that the government allowed cash transactions of over Rs 2 lakh amid a high number of covid cases.

In the case of hospitals, officials told TOI that there are several instances where PAN is not collected, despite the law requiring it. While the department is pushing for this and also planning action against wandering hospitals, it is using data available from health service providers to track patients, who had paid large sums at private health facilities. For their part, hospitals have argued that it is not always possible to retrieve the PAN because patients often present to the emergency room.


Similarly, action has been taken against some banquet halls in recent months, although the transactions are still not reflected in their books. In some segments, such as high-end watches, the tax department found transactions to be over the edge, with retailers maintaining a detailed list of buyers and their details, according to the TOI report.

Officials also reportedly said that some professionals are under the spotlight and wherever there is concrete evidence, tax authorities are acting against them. For example, there have been actions against some architects in recent months, they said, adding that it was not as if all professionals were under investigation. According to the Income Tax Department, professionals and businesses cannot make cash payments of Rs 10,000 per day.

The tax authorities believe that they have detailed data, which they use. For example, the annual information declaration generates a large volume of information, which is being processed and, wherever the data is not reflected in the declarations, it is analyzed.

hospital cash

Also Read: Bihar: Daily bet winning around Rs 500/day gets gigantic income tax notice of Rs 37.5 Lakh

Recover large sums of money

On top of that, smaller towns such as Alwar, Kota and Jalna would see the recovery of large amounts of money, officials told TOI. Recent research on steel bar makers has resulted in a huge harvest of silver and jewelry from Mumbai, Aurangabad, Nashik and Jalna.

In several small towns, the income tax department has a small footprint, which has emboldened tax evaders, who often believe they can escape the taxman’s radar, officials said. For the current fiscal year, there is a particular focus on cash transactions and several businesses where transactions still take place in cash and are under the scanner, according to the TOI report.

Read also : Taxpayers cannot register for Atal Pension Yojana from October 1

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