On Tuesday night, Indians were confused when Prime Minister Narendra Modi announced that the old Rs 500 and Rs 1000 notes will no longer be legal tender. People searched for several steps to know about to return the currency that they currently have. Many panicked and are still fiercely searching for Rs 100 notes for the day to day transactions.
However, the decision has also given many people sleepless nights. These people are not the ones who earn less and can’t afford a living, but those who have unaccounted cash and have no clue how they will return the money.
As per a Bloomberg report, “How to convert black money into white money” was trending on Google soon after Modi announced the decision. Interestingly, the highest number of searches on the topic were from Gujarat which is known for housing industrialists and the business community.
(Map showing the Google trends)
Haryana, Maharashtra also were close behind Gujarat in searching for options, shows Google Trends. National capital Delhi and Uttar Pradesh, where elections are due next year, also featured in the list.
The government has stated that those depositing large amounts of unaccounted money will have to face the consequences under tax laws, which provide for tax and a 200 per cent penalty.
But those who have no unaccounted income have nothing to be afraid of. Finance Minister Arun Jaitley advised people to keep calm and not to throng banks today itself. “With regard to people making small deposits, nobody will face any question or harassment of any kind. People who have small amount of cash at home for exigencies and emergencies, they can deposit that in their account. And the revenue department is not going to take notice of small depositors,” Jaitley said.
Revenue Secretary Hasmukh Adhia had that only cash deposits of over Rs 2.5 lakh in bank accounts will be scrutinised by the tax department and in case of mismatch with I-T returns, tax plus 200 per cent penalty would be levied.
The government has allowed citizens to deposit in their bank accounts old currency of Rs 500 and Rs 1,000, which has been declared invalid in the country’s biggest crackdown on black money, corruption and counterfeit notes, between November 10 and December 30.
On whether the demonetisation of Rs 500/1000 notes will help weed out black money, Jaitley said this is not an isolated initiative and the decision has to be seen in the backdrop of various steps being taken including GST roll out.