How the taxman is watching as you deposit cash in banks today

Today scores of people made a dash to the banks to exchange their their old Rs 500 and 1,000 notes which were declared illegal tender on Tuesday

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New Delhi, Nov 10: As banks start accepting huge wads of cash, there is the tax man watching all deposits. Those deposited above Rs 10 lakh in cash will be under scrutiny as always. However the monitoring of any deposit above Rs 2.5 lakh is particularly high today.

Today scores of people made a dash to the banks to exchange their old Rs 500 and 1,000 notes which were declared illegal tender on Tuesday.

How the taxman is keeping eye on you

Bank officials say that they would monitor closely all deposits above Rs 2.5 lakh. However if there is a mismatch in the declared income and the deposit, then 90 per cent of the money will go to the taxman as penalty.

Read more: Is Modi's next surgical strike on bank lockers?

If the taxman has a question then those who have a valid explaination about the money will not have to worry. Only those who are depositing huge amounts of cash which are not in sync with previous deposits have everything to worry about.

The banks would share all data of deposits with the taxmen. This would help the government detect irregular banking operations. It may be recalled that the government has repeatedly told banks and the IT department to keep a close tab on all deposits of Rs 2 lakh cash and above.

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