DEMONETIZATION – A WELCOME OR A WORRY ?

By CA Mehul R Shah

TABLE OF CONTENT THE CURRENT POSITION FUTHER DETAILS THE NEXT STEP ABOUT NEW NOTES A PLANNED STEP TO CURB BLACK MONEY WHY THE SUDDEN WITHDRAWAL WHAT IF YOU ARE AN NRI/FOREIGN TOURIST?! MISCELLANEOUS CONCLUSION THANK YOU

THE CURRENT POSITIONPM Narendra

Modi demonetizes Rs. 500 and

Rs. 1000 Notes

Rs.500 and Rs.1000 Notes

Valid Legal Tender Until 08/09/2016 12:00 Pm

Banks to not function on 9th Of November

2016

ATM’s to not function on 9th

and 10th of November

FURTHER DETAILS

Banks to exchange old notes for new notes from 10th of Nov till 30th of Dec

ATM’s to restrict daily withdrawal limit upto Rs.2000/day/card till 18th Of NovCash withdrawal against cheque upto Rs.10000/day subject to ceiling of Rs.20000/week till 24th of NovAll electronic modes of payment to be unaffected

THE NEXT STEP

Those who miss the 30th Dec deadline can exchange till 31st of

MarchNew Notes of Rs.500 and Rs.2000

will come into circulationGovt. Hospitals, Pharmacies ,

Railways , Petrol Pumps to accept old notes till 11th of Nov

ATM Limit to be relaxed upto Rs.4000 in the coming days

ABOUT NEW NOTES

NGC would help the government to keep track of

the notes

Rs.2000 notes to contain

NGC

New Notes in

denomination of Rs.500

and Rs.2000

A PLANNED STEP TO CURB BLACK MONEY

JANU

ARY

2013

Direct Benefit Transfer Scheme leads to linking of subsidies, pension directly to bank account

AUGU

ST 2

014 Opening of

Bank Accounts for all through the Jan Dhan Joyana

APRI

L 20

15Requirement of bank account numbers in ITR

A PLANNED STEP TO CURB BLACK MONEY

MAY

201

5Linking of Aadhaar cards with Bank accounts and PAN AP

RIL

2016Excise Duty on Jewellers @ 1%.

JUNE

201

5TCS applicable on Cash Transactions above Rs.2,00,000 from 1.6.2016

A PLANNED STEP TO CURB BLACK MONEY

June

201

6The introduction of Income Disclosure Scheme @45% tax on undisclosed income Se

ptem

ber 2

016IDS resulted

in disclosures of over Rs.65000 crore

Nove

mbe

r 201

6Stringent measures in form of demonetization to curb the menace of black money in India

WHY THE SUDDEN WITHDRAWAL

India being primarily a cash economy has resulted in Fake Notes funding illegal activities such as Terrorism.

Incidence of higher denomination notes in India has increased and lack of safety features in notes has made possible illegal activites through it

The legal tender character of the notes in denominations of 500 and 1000 stands withdrawn. In consequence thereof withdrawn old high denomination (OHD) notes cannot be used for transacting business and/or store of value for future usage. The OHD notes can be exchanged for value at any of the Reserve Bank of India or at any of the bank branches or at any Head Post Office

WHAT IF YOU ARE AN NRI/FOREIGN TOURIST?!

People not present in India can authorize someone on

their behalf to exchange the

notes

Foreign Tourist can exchange

notes upto Rs.5000 in the next 72 Hours

Person not having bank account can

authorize someone in writing to

exchange the notes

NRI can deposit the old notes in

their NRO account in banks

Authorization to be in written

form along with the exchanger’s proof of identity

MISCELLANEOUS

Exchange of notes to be made

only on ID Proof

Valid ID Proofs are

Aadhar Card , Pan

Card , Driving

License etc

Old Notes can be

deposited in Cash

Machines and Cash Recyclers

Notes exchanged after 30th of

Dec to require

additional documenta

tion

CONCLUSION

One notificatio

n to tackle

Terrorism

Funding

Black Mone

y

Corruption

Counterfeit

Currency

These are just my opinion. Opinion are like wrist watches. All show different times but all think that their time is correct…

ABOUT THE AUTHOR

Author, Mr. Mehul Rasesh Shah is a member of the ICAI. He has pursued certificate Course in International Taxation in the year 2012 conducted by the ICAI. He has also completed his Diploma in IFRS (ACCA, London) and Advanced Diploma in Management Accounting (CIMA, London) in the year 2013. Currently he is handling many Appellate proceedings including representation before the Tribunal and Settlement Commission.

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