It’s Black or White Money!
What's the color of your money?
India closed the use of 500 and 1000 rupee notes on the midnight of 8th November 2016.
In the fight against black money so far, right.
Under the earlier scheme- "The Direct Tax Dispute Resolution Scheme, 2016" -Prime Minister Narendra Modi had dared black money holders to show their undisclosed income till 30th September, failing which they should prepare themselves for legal actions. Watch that Video. Did you hear Narendra Modi when he was apparently warning a few months back? Hear Again. He explicitly warned in clear, simple language. Did you decipher it? Watch his Words.
This scheme brought a declaration of Rs. 65250 crore black money!
22,000 crores money came in from abroad as Foreign Disclosure Scheme.
Sure, Narendra Modi was successful in unearthing black money worth Rs. 1.25 lakh crores in the last two and half years.
Continuing this fight to unearth black money, Narendra Modi announced in this sudden nation-wide telecast on 8th November 2016.
What can this move bring in for you? What are the implications for you as an ordinary man? How can this one move end terrorism? Will this stop and eliminate black marketing?
If you are looking for a straight opinion or a correct in-depth analysis, this blog is for you.
Throughout the night of 8th November till 10th November, I have tracked every fact, news, and views. Furthermore, I analyzed each information and researched every implication. Just to bring you the right path to follow. To show you the behind the scene pictures of this surgical strike.
Meanwhile, this is not a one stop blog but an opinion. A view to making to enable you with the right moves.
There are many news and views floating around that are mostly creating a panic!
When I paid Rs. 2500/- for my medical tests scheduled on 9th November to M** Hospital in cash, it was accepted at 8 am with confirmation from their office. Later on, at 9 am their collection person called to say that the hospital will not take these "old" notes. When I insisted, he stated that this is a private hospital and only government hospitals are taking old notes. Finally, I had to give in and gave a cheque.
Overnight, the currency of a country became redundant! Money was changing colors!
These colors are now making people search for more facts, and there is a flurry of WhatsApp messages!
Can you believe that over ninety lakh people have done transactions over Rs. 10 lakhs and over seven lakhs people would be sent a notice from Income Tax Deptt without PAN.
Were there some colors in this money? Is it’s Black or White Money!
Is this a sudden move by the government? Was there massive movement in the 500 and 100 rupee note usage in the country? Yes, there are facts! From the year 2011 up to 2016, this denomination has grown by 40%. But, movement of Rs 500 and Rs 1,000 increased by 76% and 109% respectively. The second half of this graph explains the major increased usage of these particular notes. This is exactly what Narendra Modi tried to explain today, and we watched Modi Ji in action.
Furthermore, the detailed Government of India Notification dated November 8, 2016, informs the withdrawal of the Legal Tender status of ₹ 500 and ₹ 1,000 denominations of banknotes issued by the RBI.
How will this move help the nation in particular? Can 900 million crores be cleaned? Moving from cash economy to a banking economy.
Top 10 things to happen in the light of the reserve bank changing the colors of the rupee notes and find out if It’s Black or White Money!
- Corruption: Imagine traffic police refusing bribe! Imagine public works departments saying no to Rs. 500/- note! Sure, Corruption will come down. Happy Moments to come.
- Hawala transactions go down: How? Let's see what was happening under hawala transactions:
- Gold Smuggling
- Food prices get affected due to illegal hawala transactions
- Rail wagons used to get booked under the hawala transactions.
- Transferring money from a remote village to any country in the world was easy and profitable for this type of illegal hawala transactions
- Smuggling and terrorist activities got under way easily
- Over 23 thousand crore rupee transactions took place last year
- Underground economic activities could happen quickly.
- Fake Note gangs go burst! With no fear of fake notes, you will have full confidence. I would feel proud to be an Indian!
- Real Estate Prices could see a downward trend: Make homes more affordable. A great move for Housing Finance Companies as cash components gets moved out leading to an increase in credit demand.
- The demonization may hit resale and small builders in the secondary market and the unorganized developer's community which may be still dealing in cash.
- Demand would, however, may get boosted.
- Digital Currency like bitcoins may increase: India may see a big jump in cashless, paperless economy. All the formal channels of money will see an increase and bring in ease of convenience and transparent transactions.
- Deflationary Trend will set in now: As the use of black money had fueled inflation.
- The government has observed misuse of the higher nomination of rupees in terror funding: said the RBI governor today. We can see less of bomb blasts and terror-related activities in India.
- Modi reiterated that the cash circulation related to corruption had affected the lower-income class of India. With the new notification, one can look forward to a positive change in this class too.
- You could see a knee-jerk reaction in the Sensex! There may be a sharp correction in consumption and real estate stocks.
- Honest Tax Payers feel happy: My friends in the 30% tax bracket were jubilant today when they saw some equilibrium happening. With those with black money feeling the heat on their old currency notes, the real taxpayer would be euphoric!
If Argentina, Germany, Mexico, Israel and Turkey can change their currency recently, India can too.
Modi has certainly caught everyone unawares. While black money hoarders will be cursing him big time, including those from his alliances or other political parties
Read Original (MINISTRY OF FINANCE (Department of Economic Affairs) NOTIFICATION New Delhi, the 8th November 2016)
Now, some of the latest and the Top Eleven do's and don't after the recent demonetisation:
- Do not deposit cash more than Rs. 2 lakh at one time* & 10 lac cash in a year (1.4.16 to 31.3.17) in saving bank account. To avoid Income Tax Department Notice.
- Till 30th December no limit for depositing cash in the bank so people may make a mistake.
- Pan card must for depositing Rs.50000 /- and more.
- Do not panic and rush to the banks or post office for depositing the old notes. But remember, that you are now being monitored.
- Understand the impact. When you go to the bank for depositing the same, you first check that whether you have a cash balance in your books or not.
- Any unexplained cash deposit *attract tax @30%, interest & penalty*.
- Black money can be used to buy Gold, property & other inherent nature assets.
- People may take entries to convert black into white. Understand it's future impact before doing so.
- Update yours books of accounts immediately to know cash position. This was another way to siphon off your b***k money to w****
- You can read more about, how the latest demonetisation can boost the demand for gold jewelry: read.
- Under section 68, 69, 69(a), 69(b) and 69(c) Income Tax Act, any unexplained money will be considered as the current financial year Income. People can pay tax @30% and become compliant too. Perhaps, black turns into white by just 30% tax!! Not really! What about additional penalty!
- Section - 68, Income-tax Act, 1961-2016.
- Cash credits-Where any cash was credited on the books of an assessee maintained for any previous year, and the assessee is not able to provide an explanation. The assessee is not able to justify nature or the actual source. In Such circumstances, the Income tax officer may not find it satisfactory. Hence, the sum so credited may be charged to income-tax as the income of the assessee of that previous year
With these eleven things to watch out, you have to be very careful with your cash for the next few months. Taking some quick steps can lead to long-term repercussion. Be Careful.
Do not go by hearsay! Watch out for the what app flood of messages! They are 90% misleading and are the opinion of unqualified people. Do not go by these unprofessional opinions.
Consulting your CA or financial planner for such important matters can be beneficial. Make a list of questions to ask and get clarity. Furthermore, refer to an income tax consultant who can guide better.
This blog was made in few hours by me originally and in one day itself. After going through all the media news, RBI websites, Ministry of Finance and other relevant sources, I have compiled all the relevant information, at one place.
This blog was updated three times to make it full of updates and most relevant for you.
You can trust this blog and all pertinent information given but be sure to cross check with the actual income tax act, most appropriate.
Right to the steps and updates, the blog is original opinion and up-to-date.
You have to make now your action plan to decide your course of action. Go through the actual cash available in your books of account and then decide on how much cash you can perhaps deposit into your proper account.
3rd Update: 10th November 2016:
- While I got my Rs 2000/- new note today from the bank, surprised to see only not so affluent masses standing in the queue today morning outside the local bank! (See my pictures taken today)Shortly after evening these queues became shorter and got new notes easier.
- You should check your personal balance sheet to check if you really can deposit huge old notes in cash. Please note that your bank account is linked instantly to your income tax account. (see pictures)
- The Income Tax department has started a new area within this new cash deposited shall be entered directly from the bank entry level. As soon as the old notes are deposited into your Bank account, this new amount will start showing in this new area of the Income Tax Department linked with your PAN which is mandatory.
- Update (10-Nov/16:7 pm): while people are buying gold in huge quantities and all transactions above Rs 50,000/- requires PAN - income tax surveys happened in late evening today in Chandni Chowk. How will Gold Jewellers be able to deposit old notes into bank accounts is to be seen over a period.
On a lighter note, I saw that Gandhi was looking to his right down earlier, but now, in the new currency, he is looking towards left down... what's the NLP interpretation?
Who are the top ten kinds of people who would be worst affected by this changeover?
Top Eleven shops to Shut down!
- Land Mafia: People who have been particularly transacting or rather have been dealing with a lot of cash transactions. These people may now find it difficult to continue dealing in cash! Showing a lesser official deal in land and making a huge profit from this kind (illegal) business, may see the end of the day!
- Movie Industry: Huge cash transactions would have been going on in this industry. Primarily to bring down profits and increase expenses, these practices may come down, thus bringing in more money to the nation's exchequer!
- Politicians: Elections bring in huge cash transactions. Those Indian states that are going to the elections need the cash to handle so many of election-related expenses. Even harder to convert to smaller denominations!
- Currency Dealers: Primarily who keep unaccounted rupees may have a problem giving out foreign currency. Secondly, those foreign currency having fake money will find it harder also.
- Betting-in-games: Of course cash dealing would become impossible and perhaps betting (though illegal) may be made more organized!
- Fake Terrorist Organisations: All those "cover" companies, trusts which take the cover of being firm, and deal in inland cash movement would find it difficult to pay their people and for those illegal ammunitions.
- Fake Charitable Trusts: those fake or "under-cover" trusts dealing in converting our currency will now be disabled to operate.
- Agricultural Landlords: may find it difficult to buy and sell land in cash components. As some Indian tax laws allowed some income and cash to converted from B****k to W***e, this narrow window may shut! ON the other hand, the conventional farmers may find it temporary difficulty in cash dealing during this rupee changeover, but they will not be affected in the long run.
- Hawala Dealers: To send cash through illegal channels, not only within but across the countries, was a good business for these hawala transaction dealers. How will they operate now? Being out of business for them will force them to adopt better legal routes within INdia's legal framework and perhaps increase employment also!
- Terrorist Outfits: All those cover outfits across India will not be able to transfer cash easily. They may have to shut shop for the illegal terrorist "business." They may rather like to join the legal forces to fight terrorism in some other way, under some new scheme, which may allow them to surrender. They may get amnesty for such a pardon act to them by Government of India.
- Education: Some institutions running to cover up for illegal cash collected through donations from students seeking easy entry, may find no donations coming in the new notes! Thus, making old currency note redundant.Is it still black or did you see the new Pink colored 2000 rupee note?
If associated with any of these eleven businesses in any way, take quick decisions to move away from them. Create an immediately invisible glass wall, so that you can distance yourself from this cash-crunched activities now onwards!
Top Four Ways for NRI to convert their Indian Rupees to new Currencies till March 2017:
- Carry the cash when you travel back to India: Show your passport when back and convert to the new notes. Available until March 2017. ( applicable for up to 72 hours before your departure to India)
- Send Cash: Through your relatives going to India in the till March 2017. Remember to give a written authorization that you have given that amount of old currency for exchange in India, along with your passport photocopy.
- Local Currency Exchange Bureaus: Till the moment of updating this blog (10th November 2016: 8 pm IST), this stopped at most of those bureaus abroad. Try at the airports and other exchanges.
- Remit money: to India. NRO account is the most authentic account to deposit the old currency, but beware as most banks abroad may not taking in old currency notes as of today! Reserve Bank of India has though given instructions for such deposits into NRO accounts. Read more on RBI Circulars. You can refer to point no 21 and 22 in the recent RBI Notifications also
NRI dealing in Land in India may like to refer to RBI notifications.
Email id: email@example.com. Telephone No: +91 22 22602804 / 22602944
To further find out, what could be the least of tax which could become payable, if someone did deposit old notes in his account, I researched and found some facts:
- Update of 14th November: Taresh Verified Correct News Source: Economic Times: This news report confirms the current applicable Income Tax slabs applicable for depositing
- What are all the methods of calculating penalty? Reading this news in Economic Times
I liked the new colors! What's the color of your money? It’s Black or White Money! Still!
I have always said that coming years will see black money going to be routed out and everything will get linked, mainly through your Aadhaar number.
So, prepare your notes from tonight, plan money ahead, see the future now itself in the right colors of money.It’s Black or White Money!