The Income Tax Department has issued hundreds of notices demanding to know sources of the suspiciously large sums of cash deposited in banks, as the central government tries to tie the loose ends of their anti-black money drive more than a week after they announced they were doing away with old high-value currency denominations.

Officials said the department had begun a countrywide inquiry after banks reported there were suspiciously large cash deposits in some accounts.

"The notices are being issued where the department feels the cash deposits made in the demonetised currency is suspect. This is part of the vigil that the taxman has deployed to check instances of tax evasion, money laundering and black money in the wake of the demonetisation of the two high denomination currencies on November 8," sources in the department said.
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The notices issued by the department bear the date and sum for deposits made in the old currency and demand "supporting documents, books of accounts and bills” to explain them.

"If you are assessed to Income Tax, then you shall also file the copy of Income Tax Return of last two years," an I-T department notice issued in this regard said.

The department has upped its surveillance on real estate players, bullion traders and suspected hawala operatives to make sure that old currency is not converted, a week after Prime Minister Narendra Modi announced that the central government was replacing the country’s old 500 rupees notes and completely doing away with the 1000 rupees notes.

Cooperative banks are also being closely watched. Tax officials found old currency that totalling Rs 8 crore was exchanged by five societies having accounts in a cooperative bank.

The department has also recently issued notices to hundreds of charitable and religious organisations in the country that enjoyed tax exemptions to demand their cash balance until November 8, when the central government announced it was doing away with the high-currency notes. Reports claimed that temples saw a sudden rise in donations after the announcement as income tax evaders used their stash of money as “charitable contributions or donations” to these organisations. — PTI