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Blow to Black Money - Demonetization of Rs 500 and 1000 currency after IDS’ 2016

The government has been appropriately complimented for a very successful implementation of the Income Declaration Scheme (IDS)

Indeed, the final outcome of the declarations was significantly in excess of the initial estimates.

The Income Declaration Scheme 2016 aimed to bring in any income undisclosed by taxpayers in previous years under the tax system thus curbing black money and tax evasion in the country.

Followed by IDS, an unprecedented move by our Very Own Prime Minister NaMo on Tuesday, 8th November 2016, added a destructive edge to India's fight against black money by announcing that the currencies in the denominations of Rs 500 and Rs 1,000 will be invalid when the clock strikes 12 midnight of 8th of November. This Move was announced suddenly at 8pm & was broadcasted across all the news channels.

However, he said that all notes in denomination of Rs 100, Rs 50, Rs 20, Rs 10, Rs 5, Rs 2 and Re 1 and all coins will continue to be valid.

It was also announced that new notes of Rs 2000 and Rs 500 will be introduced.

ATM withdrawals will be restricted to Rs 2,000 per day (which will be increased to Rs 4,000 at a later stage) and withdrawals from bank accounts will be limited to Rs 10,000 a day and Rs 20,000 a week & many such restrictions & clauses.

Also in his address, PM NaMo shared his thought on how the magnitude of cash in circulation is linked to inflation & also how the inflation situation is worsened due to the cash deployed through corrupt means.

NaMo added that it adversely affects the poor and the middle-class people.  He also cited the example of the problems being faced by the honest citizens while buying houses.

So now, let us all see -

What impact will demonetizing these currency notes have on the economy, money markets, Real Estate and the Indian public, in general?

It would be great, if everyone can share their views in the Comments Below :)


 

Published by

CA Arpita Tulsyan
(Faculty)
Category Income Tax   Report

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