Quick Summary
Banks will be required to notify the income tax department about large cash deposits of ₹2,000 currency notes above a threshold as part of the statement of financial transactions (SFT) they are mandated to submit to the tax authority annually. However, the exact currency denomination of the deposits does not need to be specified. This would bring large cash deposits made during the ongoing phasing out of ₹2,000 notes under the radar of tax officials, who routinely comb through the data to
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FAQ :
No, the exact currency denomination of the deposits does not need to be specified in the report to the Income Tax Department.
The reporting thresholds are ₹10 lakh for term and savings deposits, and ₹50 lakh for current account deposits.
No, this reporting system has been in existence for a long time and is not a new provision introduced specifically because of the RBI's decision to recall ₹2,000 notes.
The purpose is to bring large cash deposits under the radar of tax officials who routinely comb through data to detect tax evasion and unusual financial behaviour.
As a measure of caution, some banks are insisting that individuals making repeated attempts to exchange ₹2,000 notes at the counter furnish their IDs.
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