According to industry sources, 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.
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 Rs 500 and RS 1,000 notes.
Prior to this, banks were only required to report to the I-T Department only when cash deposits in an account exceeded Rs 10 lakh in one full year.
In a bid to fight back counterfeit currency, black money and terrorism, the Government of India in a historic announcement decided to scrap Rs 500 and Rs 1,000 currency notes from midnight, 8th November, 2016.
The decision was taken after considering the recommendations of the Reserve Bank of India (RBI). The central bank recommended issuing of Rs 2,000 notes and new notes of Rs 500.
Prime Minister Narendra Modi made these important announcements during a televised address to the nation on the evening of 8th November 2016.