A major announcement was made by our Prime Minister Narendra Modi on 8^th of November to scrap the black money since then we can see a large number of people standing outside Banks and Post offices to deposit their money and convert their black money into white money. Government has provided a 50 day window starting from 8^th of November and ending on 30^th of December to deposit and exchange the cash.

As per the notification issued by the government on Wednesday banks and post offices are required to report to the Income tax department all deposits made above Rs 2.5 lakhs in savings account and above Rs 12.5 lakhs in current account during the 50 day window provided. These entities will also have to report cash deposits during the period aggregating to Rs 12.50 lakh or more, in one or more current account of a person.

Finance Ministry has notified the amended Rule for filing of Annual Information Return (AIR) report by banking company, cooperative bank and post offices on account of aggregate cash deposits in one or more current account of a person. Banks and post offices now have to file a statement of financial transaction in respect of these transactions on or before January 31, 2017, the notification said.Earlier banks and Post offices were required to report to the I-T department when the cash deposit in an account exceeded Rs 10 Lakhs in one full year.

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