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May 01, 2025
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Taxman invokes benami law to get data from payment gateways
The Income-Tax (I-T) Department has invoked the benami law to fish out information from a few payment gateway (PG) companies.
At least two firms have been told to disclose the identities of persons linked to a string of United Payment Interface (UPI) IDs, the entities who received money, and details like transaction date, amounts, and bank account numbers.
Gateways offer a network for customers to send money to businesses and merchants. Shell companies posing as merchants sometimes register themselves with PGs to move money.
The tax office, probably based on feedback it has received, would verify whether some merchants are holding money on behalf of others; or, if sham merchants are helping fund remitters book bogus expenses to evade tax. Here, the receiver later returns the funds in cash to the sender.
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