Just after the currency ban of Rs 500 and Rs 1000, the govt. has warned cash depositors who are depositing more than 2.5 lakhs of cash. If they deposit more than 2.5 Lakhs then they will come under the scanner of Income Tax department. In case of income mismatch, a heavy penalty of 200% will be imposed on them.

“We would be getting reports of all cash deposited during the period of November 10 to December 30, 2016, above a threshold of Rs 2.5 lakh in every account.

“The (tax) department would do matching of this with income returns filed by the depositors. And suitable action may follow,” revenue secretary Hashmukh Adhia said tonight.

Any mismatch with income declared by the account holder will be treated as a case of tax evasion.

“This would be treated as a case of tax evasion and the tax amount plus a penalty of 200 per cent of the tax payable would be levied as per the Section 270(A) of the Income Tax Act,” he said.

The government has allowed citizens to deposit in their bank accounts old currency of Rs 500 and Rs 1,000 denominations, which had been declared invalid in the nation’s biggest crackdown on blackmoney, corruption and counterfeit notes, between November 10 and December 30.

Adhia said small businessmen, housewives, artisans and workers who had some cash lying as their savings at home should not be worried about any tax department scrutiny.

“Such group of people… need not worry about such small amount of deposits up to Rs 1.5 or 2 lakh since it would be below the taxable income. There will be no harassment by the Income Tax Department for such small deposits made,” he said.