Demonetisation and its Aftermath

[asingh]

This is a stupid move. Aside from the obviously stupid move of suddenly dropping the news on every one, it is claimed that this will help curtail black money.

I guess this was done to prevent a run on the banks. There would have been mayhem. Recall: Petrol prices are about to go up, what happens...!

1. Do people still believe that the corrupt keep their black money stashed in their home? Most of them are clever enough to stash it offshore tax havens.

Irrespective where the money is kept, it will be more difficult (but not impossible), to inject the money back into India. They are soon going to announce (am sure) more stringent methods to monitor and see banking transactions. Of course Indian's horde money. Gold and black market investment into RE is also hording. People re-sell the property and take the original black component + the premium (a portion) in black, and infuse it back into RE. It is cyclical. It is a prime factor for the false appreciation of RE, at least in the NCR.

2. Usually countries don't print currency with high denomination in order to keep black money in check. So someone please tell me how is swapping 1000 Rs. note for 2000 Rs. note is going to achieve that?

It is a system reset, with and underlying warning. We may do this again. 10-15 years. Not a long period, for people who want to horde.

 

[drkrack]

During this week, shops which sell electronic items will have a great time. Most people having black money will disburse of it by buying TV's/AC/phones/laptops etc. 500/1000 may not be legal tender but if you are getting such good sales, people will readily accept the money and fulfill their sales target. Also people won't haggle during this time as the salesperson may not accept the old 500/1000 notes if the buyer tries to reduce his cut. [emoji14]

Lesser priced 2nd hand cars are a good place of investment for people having lots of black money.

Huge number of unemployed youth will make a killing the next 50 days. They take a cut and deposit money in their account. Once money can be taken out from ATM, take it out and give the person back the agreed amount. They will also use their grandmother's, grandfather's and mom, dad's account for this purpose.

There's been a circulation to that, any high values cash in flow to any account during this period which is unusual to the transaction history of that account will invite further enquiry. Any amount of cash flow above Rs 2.5L during this period will undergo scrutiny & will attract a penalty taxing up to 200%, IT Dept is watching this closely.
Say, some unemployed youth around 100 will be needed to convert 2.5Cr (Again Modi claims of LAKHS to everyone's account will be realized, only catch people instead of govt will be depositing it) ! Which has hell lot of logistic issues to handle till the 2.5L to be withdrawn bit by bit from the account. If any of the transaction gets investigated the hoarders will be caught.

https://www.google.co.in/amp/m.time...cleshow/55337762.cms?client=ms-android-xiaomi

Gold is seemingly a better place to park the money currently ; but govt has a proposal to restrict the amount of gold owned and do an inventory for each individual in the near future. Govt has a proposal to target Benaami Properties and Companies in the next installment.

How many 2nd hand Cars, iPhones you'll buy to convert cash in excess of 10cr? Its impractical. Again govt seems to be targeting the big fishes here, they'd probably let others up to the tune of ~10cr (assumption) can get away after paying the due taxes. This is the beginning of actual voluntary disclosure scheme in Modi way.

Just wait for BJP2 and the scams will be back. Even now, Vyapam scam was covered up by killing so many people. And the industrialists like Adani and others have already been rewarded by giving them govt lands at cheap rates.
I can appreciate this good move but there have been a lot of cases already that have clearly shown to me that this govt is not a lot different from previous ones.

This move would convince any logical critic on Modi govt about their seriousness to curb black money and thereby corruption. As far as NDA 2 is concerned it's definitely possible if LK were to be the PM & the rest of BJP is just marginally better over Congress. Modi continues, I'm very much clear about whom to vote in 2019!

http://www.indiatimes.com/news/indi...-and-paying-only-rs-300-in-return-265176.html

To be honest, many brokers are offering only Rs 200 per 500.

Lets just hope that there would be at least some money coming into ATM's by next two weeks at least. At least some of the people I know are in a fix due to not having money. One guy had to break his daughters piggy bank and has only that loose change (coins) to use till he could get money from ATM's.

http://timesofindia.indiatimes.com/...y-on-income-mismatch/articleshow/55337762.cms

Again, while this would catch tax evaders who didn't pay any tax at all, what about the situation for people who do pay the taxes but have such an amount in tax cleared cash. How does one prove that such an amount is already tax cleared and not undeclared income? If somebody withdraws money now and then to the point that he has Rs 3 Lac in cash. He will not be able to prove that the source of that money is the withdrawals over multiple years and that its all tax cleared. So, that can mean that he will have to pay the taxes again with penalty. 90k (taxes @ 30%) + 180k (penalty @ 200%) = 270k of the amount to IT dept.

Again what's the percentage of tax payers in the country? Some inconvenience is inevitable. If you want a safe flight you'll have to bear with the inconvenience of getting frisked.

People were crying that, Modi didn't do anything to curb black money menace, now they're claiming its harsh - come on.

I spoke to my CA yesterday on the pretext of options to dispose stash. His advice "Burn it" if you want to avoid the prison, no legally safe options as of now. Modi seems to have achieved his objective, people will be very honest, when next voluntary disclosure scheme is offered.

http://indianexpress.com/article/bu...3-lakh-crore-black-money-destruction-4367271/

 

[kuduku]

Whatever said and done Modi has reduced corruption in higher echelons of power in Delhi . Politicians and bureaucrats will devise ways and means to be corrupt but this was a good step . Only thing he should not have allowed the bank holiday and cancelled them prior instead of acting after public outcry
Would have gone positive for them showing their efforts to help public and ease money tendering problem

 

[Lord Nemesis]

Again what's the percentage of tax payers in the country? Some inconvenience is inevitable. If you want a safe flight you'll have to bear with the inconvenience of getting frisked.

People were crying that, Modi didn't do anything to curb black money menace, now they're claiming its harsh - come on.

The tax payers percentage is 1% and those are the ones running the nation and those are the ones that the govt is answerable to as public servants. Curbing black money menace does not mean that its alright to potentially penalize honest tax payers.That is not akin to getting frisked. That is more like frisking and still just to be sure, taking aside shooting down every bearded person assuming that one of them may possibly be a terrorist.

Minor inconvinience is acceptable. We already deal with the inconvenience of going through a crappy Tax deduction and filing processes in the country. But, If even a single honest tax payer gets penalized in the process of curbing tax money, the govt has utterly and thoroughly failed in its job

 

[hotshot05]

There's been a circulation to that, any high values cash in flow to any account during this period which is unusual to the transaction history of that account will invite further enquiry. Any amount of cash flow above Rs 2.5L during this period will undergo scrutiny & will attract a penalty taxing up to 200%, IT Dept is watching this closely.
Say, some unemployed youth around 100 will be needed to convert 2.5cr! Which has hell lot of logistic issues to handle till the 2.5L to be withdrawn bit by bit from the account. If any of the transaction gets investigated the hoarders will be caught.

https://www.google.co.in/amp/m.time...cleshow/55337762.cms?client=ms-android-xiaomi

Gold is seemingly a better place to park the money currently ; but govt has a proposal to restrict the amount of gold owned and do an inventory for each individual in the near future. Govt has a proposal to target Benaami Properties and Companies in the next installment.

How many 2nd hand Cars, iPhones you'll buy to convert cash in excess of 10cr? Its impractical. Again govt seems to be targeting the big fishes here, they'd probably let others up to the tune of ~10cr (assumption) can get away after paying the due taxes. This is the beginning of actual voluntary disclosure scheme in Modi way.

This move would convince any logical critic on Modi govt about their seriousness to curb black money and thereby corruption. As far as NDA 2 is concerned it's definitely possible if LK were to be the PM & the rest of BJP is just marginally better over Congress. Modi continues, I'm very much clear about whom to vote in 2019!



Again what's the percentage of tax payers in the country? Some inconvenience is inevitable. If you want a safe flight you'll have to bear with the inconvenience of getting frisked.

People were crying that, Modi didn't do anything to curb black money menace, now they're claiming its harsh - come on.

I spoke to my CA yesterday on the pretext of options to dispose stash. His advice "Burn it" if you want to avoid the prison, no legally safe options as of now. Modi seems to have achieved his objective, people will be very honest, when next voluntary disclosure scheme is offered.

http://indianexpress.com/article/bu...3-lakh-crore-black-money-destruction-4367271/

Hawala money has lots of logistics but still it flourishes. So people are already kind of used to this. People won't face any issue. Currently, money hoarders are trying to cut their losses. So whatever they can salvage, they will.
IT Dept can try to do many things. But if 10-20 lakh people start doing something, it would be very hard to track and implement. Add to that area specific problems (Metiaburuz, park circus, dock area in Kolkata, hinterlands of UP where police do not even feel safe). No one files taxes. So they don't care if IT Dept slaps penalty.

 

[asingh]

Hawala money has lots of logistics but still it flourishes. So people are already kind of used to this. People won't face any issue. Currently, money hoarders are trying to cut their losses.

How will Hawala flourish now, when the lifeblood, the currency, has been declared useless...?

 

[hotshot05]

How will Hawala flourish now, when the lifeblood, the currency, has been declared useless...?

https://www.techenclave.com/community/index.php?posts/2106209

 

[chiron]

Is the govt. going to pay the people who declared their taxes honestly and are being inconvenienced by this measure? like maybe tax deductions for people who actually paid their dues? obviously not because doing that fairly would be as impossible as actually managing to curb black money in the long run.

 

[asingh]

https://www.techenclave.com/community/index.php?posts/2106209

Which part answers what I asked..?

 

[hotshot05]

Which part answers what I asked..?

They will use people to replace the money bit by bit. e.g - Use 100 people to deposit 2crore money and withdraw it later.

By the way, I never said anything about Hawala money flourishing in future. I was talking about the past. Hawala used thousands/millions of people to transfer the money.
Similarly people with black money will use similar methodology to convert their black money to white. They are trying to contain their losses. They won't be able to convert their whole wealth into white money. But even if they can save 2cr, that is quite a lot. The A-listers of the black money world already keep their cash in tax heavens outside India. Only the small fish will be affected by this thing (teachers giving private tuitions and not declaring it, doctors with private practice, roadside eateries/restaurant owners, people who have taken bribes etc)

Heard in office that somewhere in Maharashtra, a money lender is offering interest free credit. You take the money in old 500/1000 bills. Get the money converted to new bills and pay him back in 6 months. People have printed posters and put it up in different parts of the town.

 

[chiron]

Last time there was so much talk about politics was when Jan Lokpal was going to fix "corruption".

 

[drkrack]

They will use people to replace the money bit by bit. e.g - Use 100 people to deposit 2crore money and withdraw it later.

By the way, I never said anything about Hawala money flourishing in future. I was talking about the past. Hawala used thousands/millions of people to transfer the money.
Similarly people with black money will use similar methodology to convert their black money to white. They are trying to contain their losses. They won't be able to convert their whole wealth into white money. But even if they can save 2cr, that is quite a lot. The A-listers of the black money world already keep their cash in tax heavens outside India. Only the small fish will be affected by this thing (teachers giving private tuitions and not declaring it, doctors with private practice, roadside eateries/restaurant owners, people who have taken bribes etc)

Heard in office that somewhere in Maharashtra, a money lender is offering interest free credit. You take the money in old 500/1000 bills. Get the money converted to new bills and pay him back in 6 months. People have printed posters and put it up in different parts of the town.

That is what is going to be tough, you need 100 people to trust and they can withdraw the amount bit by bit, that too for mere 2.5cr ! any one of them spills the beans they're at risk. There is no necessary for person taking money to pay back. It is impractical for above 10cr owners. Likely that the money have to be burnt to get rid of the malice !
Process has started ..

http://english.pradesh18.com/news/u...d-rs-1000-notes-found-in-bareilly-918548.html

 

[hotshot05]

That is what is going to be tough, you need 100 people to trust and they can withdraw the amount bit by bit, that too for mere 2.5cr ! any one of them spills the beans they're at risk. There is no necessary for person taking money to pay back. It is impractical for above 10cr owners. Likely that the money have to be burnt to get rid of the malice !
Process has started ..

http://english.pradesh18.com/news/u...d-rs-1000-notes-found-in-bareilly-918548.html

Like I said, they will go for damage limitation. Money saved by this method is money earned.

 

[PoBoy]

has anyone been to a bank today and actually :
- converted old notes to new, or
- deposited old notes to his bank account.

what exactly is the procedure, and what documents are required?

 

[seshu]

^ below might help !
* rs-500 rs-1000 currency notes exchange form
* rules & procedure for depositing cash

 

[killmastern3]

has anyone been to a bank today and actually :
- converted old notes to new, or
- deposited old notes to his bank account.

what exactly is the procedure, and what documents are required?

I did that, exchanged 4 1000's to 2 2000's. There is a form to fill (attached). This form along with copy of ID proof will suffice.

 

[swatkats]

has anyone been to a bank today and actually :
- converted old notes to new, or
- deposited old notes to his bank account.

what exactly is the procedure, and what documents are required?

Deposited all the cash with me by filing a form at home branch and quickly gave a self pay cheque to withdraw 10k in the denomination of 100's

 

[PoBoy]

thanks all.
you need one copy of the form or a xerox too? lol

 

[seshu]

^ form should be available at the Bank.
better to have a copy of the ID proof to submit if required along with the original to show

 

[PoBoy]

and, this form is to be filled only if you are exchanging notes, or also if you are depositing cash in you bank account?