As per the IT department, the physical cash circulation in India is Rs 17 lakh crore and out of this, 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.
The Income Tax department will keep a check on individuals who exchange cash amount of Rs 2 lakh and above.
The objective is to make Indians tax compliant, eventually leading to higher revenues for the government.
The IT department has been asked to keep record of every individual, their PAN card details, and tally it with 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.