MUMBAI, November 15, 2016 /PRNewswire/ —
The PM’s drive to get the economy free of black money and unearth the huge reservoirs of cash funds from the Black Money market has left the nation dumbfounded. Whereas the common man is grappling with the issue of currency shortage, there are others who are in a dilemma about how to convert their black money to white without facing prosecution. Although this amazing move has not left any way out for money hoarders, they are still trying to find ways.
The day demonetization of currency notes of Rs. 500 and Rs. 1,000 was declared, there was a spike in the gold rates in a few hours and the prices rose to an impossible amount of Rs. 70,000 in some markets. People rushed to make their money white by investing in gold. However, as rightly pointed out by experts, this was not really a way out. Gold purchased at higher prices due to spike in rates will lose value since the prices will drop soon. Moreover, with the new rule to quote PAN card in all transactions of gold, the buyers are required to disclose their PAN while purchasing gold and hence these transactions can be tracked. Even traders are supposed to disclose inputs and outputs under the excise law.
Although the PM has announced that housewives depositing any amount up to Rs 2.5 lakhs will not be questioned on any grounds, those who deposit money in family member’s accounts e.g. mother, father, children can go unscrutinized. Amounts as high as Rs. 10 lakhs will definitely go under the scanner and matched with the income records and penalty of 200% under section 270A will be levied on this amount being treated as undisclosed income. This section is applicable in case of under-reporting of income where minimum penalty is 50% and maximum is 200% where there is misreporting of income.
There can be cases where a person has paid the entire taxes due on the amount he wants to deposit in bank and has also disclosed this amount in his return of income. In such case, these people can face the discomfort of proving that the money is tax paid but may not face any penalty.
There has also been a spurt in the Jan Dhan accounts being flooded with money. Rs 49,000 can be deposited in these accounts without quoting PAN. Reports also say that these Jan Dhan account holders have been approached by agents luring them with Rs 500 so that they may deposit money in their account. It was expected that agents might take advantage of this but the fact remains that large amounts of money cannot be traced and managed by using such small amount transactions.
The exit routes are so closely guarded now, with income tax officials tracking almost every move, that the parallel cash economy is now bound to break down to a large extent.
Meanwhile, the nation is busy queuing up at banks and though the common man is out there supporting the PM by bearing the brunt, there are a lot of people who might have just bid adieu to their money stacked somewhere with a hope to escape taxes.
Masterstroke, master plan that was brilliantly executed by the grand master, PM Narendra Modi.
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