The Income Tax Department of Government of India has exempted the deposits made by senior citizens from scrutiny. As per the latest guidelines, the cash deposits by the citizens above 70 years during demonetization period will not be scrutinized by the Income Tax Department.
The deposits worth Rs. 5 lakhs will not attract any scrutiny. The limit of Rs. 2.5 lakhs is applicable for all other account holders. The IT department will only observe the cash flows into the accounts of senior citizens above 70 years and will not issue any notices to them.
Those deposited more than 2.5 lakhs have to disclose the sources of income through online only. There will not be any further inquiry if the previous IT returns and the disclosed information matches on the records. The IT department may seek more information if the records did not match.
The IT department has identified about 18 lakhs accounts as eligible for scrutiny and may ask them to furnish more information on the deposits. The entire process is named as Operation Clean Money.