On November 10th, the government of India detailed the potential penalties faced by tax evaders during the current demonetisation process.
On November 9th, the government announced that certain high-value currency notes will no longer be legal tender in India, and that there is a timeframe of 50 days in which those notes can be deposited in bank accounts, before the notes become nothing more than paper.
Under the conditions detailed in the latest announcement, individuals who deposit more than INR 2 500 may face extra scrutiny by tax officials, who will receive full records of all deposits made.
Tax authorities will also levy a fine of up to 200 percent on any deposits which do not adequately match the declared incomes of taxpayers.
The demonetization is expected to help stifle activity on the underground economy in India, while the penalties could help bring in revenues while also punishing individuals who have stashed away large amounts of undeclared earnings and cash.