With demonetisation of Rs 500 and Rs 1,000 currency notes, the government has directed Income-Tax Department to coordinate with all banks and furnish details of individuals who exchange cash amount of Rs 2 lakh and above.
“A key reason for scrapping these two currency denominations is to curb the huge menace of fake currency, tackle black money and make India a cashless economy,” said a senior I-T department official.
The object was also to make Indians tax complaint, which will eventually lead to higher revenues for government, he added.
The tax department has been asked to keep record of every individual along with his/her PAN card details and tally it with the tax filing. Accordingly, the department will impose penalty, which could be between 30 per cent and 120 per cent, depending on the source of income.
India has physical cash circulation of Rs 17 lakh crore, of which 88 per cent is Rs 500 and Rs 1,000 notes. Official data suggest that 40 per cent of black money is generated in real estate, while stock market and bullion transactions are other big sources.
Estimated total value of gold in India at 25,000 tonnes is Rs 70 lakh crore. India imports 750-1,000 tonnes of gold every year.
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