Transfer from bank accounts after the cash is deposited to any entity not related to the business will also be closely examined, a senior government official said, adding that cash donations will also be looked into.
The panel headed by Finance Secretary Ashok Lavasa is reviewing Seventh Pay Commission allowances.
From February 20, the limits from cash withdrawal from savings bank accounts were increased to Rs 50,000 per week. And effective March 13, 2017, there will be no limits on cash withdrawal from savings bank accounts.
"There is absolutely no cause for panic. We are not going after everyone who deposited their holding of the demonetised currency in bank accounts between November 8 and December 30, 2016," a senior Finance Ministry official said.
The government had in June accepted the recommendation of Justice AK Mathur-headed Seventh Pay Commission in respect of the hike in basic pay and pension but its suggestions relating to allowances were referred to the committee.
The new Composite Claim Forms (CCF) do not require employers' attestation, but only for those subscribers whose Aadhaar number and bank account details have been seeded with their Universal Account Number (UAN).
The CBDT has also said verification under this exercise should be completed quickly.
"There has been over 17 million downloads of the BHIM app so far," Niti Aayog CEO Amitabh Kantsaid.
The launch of this facility will not only ease the process for subscribers but also speed up the processing time.
The Seventh Pay Commission had recommended that HRA be paid at the rate of 24 per cent, 16 per cent and 8 per cent of the new Basic Pay, depending on type of cities.
So far, it has received replies from over 7 lakh people who have accepted making such deposits and the department will issue letters to the remaining nudging them to explain the source of deposits on the e-filing portal under Operation Clean Money.
In December 2016, the government had decided to absorb the merchant discount rate (MDR) charges in respect of debit card transactions for making payments to it.
Under 'Operation Clean Money', the I-T department had sent SMS and e-mails to 18 lakh people, who according to its data analysis had made suspicious deposits of over Rs 5 lakh during the 50-day window.
In Budget 2016, the government had given additional tax exemption up to Rs 50,000 for contribution to NPS apart from the Rs 1.5 lakh ceiling provided under Section 80C.
The tax relief for sick companies approved by Board for Industrial and Financial Reconstruction (BIFR) under Sick Industrial Companies Act, 1985 will not automatically apply as the SICA has been repealed with effect from December 1, 2016, the tax department has said.
Responding to the SMS/email queries under 'Operation Clean Money', the assessees have disclosed additional 25,000 bank accounts in which cash was deposited.
The government is trying to put a strict system in place to check misuse of LTC.
On January 31, the tax department had launched 'Operation Clean Money' under which it had sent SMS and e-mails to 18 lakh assessees in the initial phase for suspicious cash deposits of Rs 5 lakh and above made during November 9-December 30, 2016.