MUMBAI • India's government has rejected a US$29 billion (S$41.3 billion) declaration of income from a family of four citizens. That fortune would have made them wealthier than the nation's richest man.

The Mumbai-based Sayed family comprising the patriarch, his wife, son and sister together declared 2 trillion rupees (US$29 billion) - far exceeding the US$21 billion fortune of Mr Mukesh Ambani, India's richest man - during a government programme offering amnesty on undisclosed income, the Finance Ministry said in a statement on Sunday.

Another man from Prime Minister Narendra Modi's home state of Gujarat revealed 138.6 billion rupees of illegal income, known locally as black money.

"After due inquiry, it was found that these were persons of suspicious nature and very small means and the declarations could have been misused," the statement said. The department has since started a probe "to determine the intention behind these false declarations".

Mr Modi, who is attempting to fulfil his election pledge of unearthing black money, in September offered tax evaders an amnesty in exchange for a one-time levy of 45 per cent tax on their income.

That programme led to a disclosure of 673.8 billion rupees of illegal income, excluding the two cases rejected by the Finance Ministry.

While the government did not elaborate on why it found the transactions suspicious, analysts said these may be cases where individuals used the people to launder cash.

"This obviously appears to be a case of money laundering and it's the right thing on the part of the tax authorities to launch an investigation," said Mr Anil Verma, national coordinator for the New Delhi- based independent governance watchdog Association for Democratic Reforms. "To me this isn't surprising at all, given the large part that cash plays in our economy, from elections to real estate."

The Sayed family gave their address as in an affluent Mumbai suburb, but older information with the tax authorities showed three of the four lived in the city of Ajmer, in the Indian state of Rajasthan, and their address had been changed only in September, according to the Finance Ministry.

BLOOMBERG