The cash, bullion and jewellery "were found stashed in a secret chamber of a bathroom in the house of a hawla operator at Challakere in Chitradurga district during search operations on Friday", said the official in a statement here.
Challakere is about 200 km away from Bengaluru.
The tax department's investigation wing searched premises of casino operators and bullion traders in Hubballi and Chitradurga districts on a tip-off that black money was being converted into white through laundering and hoarding.
"When teams of sleuths searched 15 places in the two districts, a hawala operator at Hubballi was found converting old notes and hoarding bullion (gold biscuits) using demonetised Rs 500 and Rs 1,000 notes," said the official.
Incriminating documents related to the illegal activities were also recovered during the raids and are being examined.
"Searches are being conducted in both the districts to curb the illegal activity," added the official.
On December 1, tax sleuths seized Rs 6 crore in cash and 7 kg gold from the residences of two state government engineers in Bengaluru.
Of the cash haul, Rs.4.7 crore were in the new Rs.2,000 notes.
