I-T Department to investigate frozen Demat Accounts

The income-tax department will start investigation into lakhs of frozen demat accounts to unearth black money and undisclosed transactions in them.

The money in these accounts could run into thousands of crores, sources in the department said. Certain preliminary checks have revealed undisclosed transactions and accounts that have not been disclosed, have been used to hide black money, a tax department source said. The accounts were frozen by the two depositories, National Securities Depository Ltd (NSDL) and Central Securities Depository Services Ltd (CDSL), on January 1, 2007.

This move came after lakhs of investors failed to comply with the government’s directive to furnish details of their Permanent Account Number (PAN) while transacting in the financial markets.

“We have received a list of suspicious accounts and investigation (into those) will start,” the source said.

Tax department sources said that with the help of the unique PAN numbers they have been able to track down shareholders who are not running their accounts. In certain cases the account-holder may have died, and some may have changed addresses and did not inform the department, a source said.

Source: The Financial Express