Its a high alert for those changing the colour of the money from black to white, illegally. Taxmen are on the prowl and have already caught such a transaction valuing about Rs 100 crore recently. Popularly known as accommodation entry, the Income Tax (I-T) department is going the whole hog to catch the culprits and would keep strong track of large sales of jewellery.

These transactions are usually made to convert black money into white. The modus operandi goes something like this. An individual uses his black money to make cash payment. In exchange, he obtains a cheque of equivalent amount from the other party.

The first party then shows a fictitious sale, for instance, the sale of family jewellery to account for the receipt of the cheques in his bank statement. The reverse transactions occur when people give out loans and take the sum back as cash.

The tax department is now training its guns on such transactions, as they seem to be an ever-popular means to evade tax. Following this cache of Rs 100 crore, the intelligence wing of the department is keeping a close tab on other such transactions. The department, accordingly, plans to follow up large cases of jewellery sales and track both parties carrying out the transaction. It is also likely to look into returns which show a sudden loan, where too both the parties would be examined.

In addition, it would also closely scrutinise I-T returns where there have been huge claims for exemption from capital gains tax or a sudden rise in investments by the non-salaried. In fact, at the annual conference of the chief commissioners and directors general of I-T department last week, a lot of emphasis was given to tightening of scrutiny norms especially for high-income earners.

The step is basically part of larger exercise to identify new measures to increase tax collections along with broadening the base. Scrutiny is being deepened further, as clubbed with the third party information, it would help the department in plugging various loop holes while enhancing tax collections.

The Annual Information Return has already thrown in heaps of information which the department will use to track down tax evaders. Giving a warning of sorts, finance minister P Chidambaram also delivered a very crisp and clear message at the conference - pay taxes, file your return or the department will get you sooner or later.