NEW DELHI: Based on initial estimates that as much as Rs 4 lakh crore of undisclosed funds may have flown into bank accounts post-demonetisation, the tax department is gearing up to serve notices on those who cannot explain the source of the money.Data with the income tax department shows that till December 17, cash deposits of Rs 80 lakh or more added up to nearly Rs 4 lakh crore, which flowed into 1.14 lakh bank accounts. Tax department officials suspect that a large chunk of this amount could have come from those who dodged taxes. An exercise is on to verify the genuineness of the deposits and tally them with tax returns, with officials saying there was no way genuine taxpayers would keep hoards of cash at home.The income tax department has already served around 5,000 notices to those who have deposited unusually large amounts of cash in banks. “People thought the government will not do anything and kept depositing money. We have been analysing data on a weekly basis and we are going to act against those who have unaccounted money. Obviously, we want everyone to come forward and themselves pay taxes,” said a senior official, adding that the government was hoping to earn “good revenue this year”.The government’s message that it was keeping a close watch came at a time when it announced a fresh scheme which would allow those with undisclosed cash to come clean by paying 50% tax. Those who don’t opt for the scheme, open till March 31, will have to shell out around 90%. Sources said nearly 60 lakh individuals and firms had made deposits of around Rs 7 lakh crore in old notes but were quick to add that some of that could be from “institutional sources” which could be explained.While data for deposits of as low as Rs 30,000-40,000 is being analysed for Jan Dhan and dormant bank accounts (where there was no activity for a year or two), there are certain other aspects that have really caught the taxman’s attention.For instance, between November 10 and the end of November, 1.77 lakh borrowers had repaid loans of over Rs 25 lakh using old notes — with the repayments adding up to nearly Rs 50,000 crore. The list included companies and firms apart from individuals. Officials said the tax department intends to go after those who made large repayments in cash. Similarly, the tax department, sources said, has come across instances where bank accounts that were not compliant with KYC norms saw deposits of over Rs 1 crore.The data is interesting considering that the scramble to deposit old currency with banks has led many to wonder whether a large number of suspected tax evaders had devised ways to launder their unaccounted money. The fear that tax dodgers may have aced the system was the goad for the government to switch gears and launch a new version of the Income Disclosure Scheme. The nature and quantum of deposits could possibly be both because of the willingness to turn undeclared income into legit money after forfeiting more than half of it by way of tax or because of the confidence that authorities would find it difficult to trawl through the mine of data to spot those who thought they had gamed the system. Importantly, the data does not bear out the widespread misuse of Jan Dhan accounts While deposits in Jan Dhan accounts have come under the scanner, officials said the amount involved was not very large. Contrary to the notion of widespread misuse of the nofrills bank accounts, a mere 34 saw deposits of Rs 10 lakh or more with the highest deposit being Rs 58 lakh.Sources said the maximum number of deposits into Jan Dhan accounts were made in West Bengal and Karnataka , with Delhi topping the list among ‘urban centres’.Sources said the estimate of undisclosed money was preliminary and based on multiple sets of data that the income tax department was analysing. The government had earlier suggested that it was in for a “windfall gain” post-demonetisation.