IT dept to de-freeze 100 demat accounts

The department has been probing more than 6,300 frozen demat accounts, which had Rs 6,700 crore of unclaimed stocks.

Some claims on these accounts have been found to be genuine by the Income Tax (I-T) department. They will be recommended for de-freezing to the two depositories-- National Securities Depository Ltd (NSDL) and Central Securities Depository Services Ltd (CDSL)-- who froze them in January 2007, after legal formalities, official sources said.

Sources said the number of such accounts could be 100 as the exact amount of money in these accounts is being ascertained.

A number of such accounts were lying idle since 2007 but the I-T department had of late received claims by individuals of these accounts, they said.

During its probe, the I-T department had found monetary links of these frozen demat accounts to various other bank accounts and investment avenues like share markets.
The department is checking the veracity of the account holders as it suspects certain 'benami' accounts also.

The department is investigating into 6,385 frozen demat accounts, which had balances in excess of Rs 10 lakh as on December 2008.

Demat accounts are required for trading in the stock exchanges. Without a demat account no trading can be done.

The I-T department earlier had asked its Chief Commissioners of Income Tax (CCITs) to serve notices to all the account holders and report unclaimed accounts so that such accounts can be seized.

The respective I-T Commissioners are now preparing 'detailed reports' on the transactions of these accounts.

The I-T authorities with the help of the unique PAN had also tracked down a number of shareholders of these accounts.

In certain cases it was found that the account holder had died and some had changed addresses without informing the assessing officers of the department.

The probe earlier had found thousands of investors were receiving money in the form of allotment of shares in IPOs.

These accounts were frozen by NSDL and CSDL, on January 1, 2007, after investors failed to comply with the government's directive to furnish details of their Permanent Account Number while transacting in the financial markets.

After the 2006 IPO scam, stock market regulator SEBI had made it mandatory for depository participants, and later investors, to quote PAN for operating demat accounts.