Moving quickly to plug loopholes, the Income Tax Department has asked banks to report all cash deposits exceeding Rs 2.5 lakh during the 50-day window provided to tender the now-defunct 500 and 1000 rupee notes.
Previously, banks were required to report to the I-T Department only when cash deposits in an account exceeded Rs 10 lakh in one full year.
But in view of apprehensions that large number of illegal or black money may sought to be converted into white during the window provided till December 30, the Revenue Department has issued fresh set of instructions, a top official said.
“The attempt will be not to harass honest citizens who are free to tender all of their legal, old high-denomination currency savings in their bank accounts and get new ones,” he said.
But the window provided to them will also be not allowed to be misused, he said, adding that the Income Tax Department is keeping a close eye on all high-value deposits.
Those depositing large amounts of unaccounted money will have to face the consequences under tax laws, which provide for a 30 per cent tax, 12 per cent interest and a 200 per cent penalty.