The income tax (I-T) department last week sent notices to two large private banks in its ongoing probe into alleged malpractices involving commission payments by insurance companies, official sources aware of the matter told. Names of the two banks concerned were not immediately known.
Initially, the I-T department was probing more than 20 insurance firms and about 500 entities linked to their sales agents. But the line of investigation has now shifted to the banks after the probe allegedly revealed voluminous transactions demanding further explanation. “The notices have been sent under Section 131 of the Income Tax Act and information pertaining to the manpower deployed by the banks and the mode of payments had been sought,” said a source aware of the contents of the notices.
India’s income tax department sent notices to two private banks in its ongoing investigation into possible malpractices involving commission payments made by insurance companies. The initial investigation focused on over 20 insurance firms and around 500 entities linked to their sales agents. However, officials have now shifted their attention to banks, as voluminous transactions have been revealed. Investigators are apparently scrutinising transactions in excess of INR60,000cr ($8.06bn) and also investigating suspected GST evasion exceeding INR 5,500cr.