Team-BHP - Government scraps Rs 500 and Rs 1000 notes!

I think the people in the know and the super rich used the amnesty scheme to whiten their money. It is the smaller businesses who are now going to be fleeced by launderers!!
The people will find a way, probably at a steep price.

Real estate transactions are the biggest culprit in black money. This move will surely arrest the black money flow. Hope RE does not crash but some sanity will be back in property valuations.

Quote:

Originally Posted by AltoLXI (Post 4089110)

The entire parallel economy of black money running into lakhs of crores is dependent on higher denomination currencies. Corrupt officials, politicians, real estate industry etc all deal in 500 and 1000 rupees currency notes.

And to add to that, once all the 500/1000 notes are back into the system, they are now white, with a trace as well on who converted how much. There is also a capping put in place. INR 20,000 per week per person. Of course people will find ways and means to withdraw more, asking poor friends and relatives etc, but then again there is a limit to that.

We are talking about lakhs of crores.

In any case, once the entire money is back in the system, generating black money again is a tough task. It is not easy anymore, since there is the requirement on PAN details on withdrawal above, I think, 50k at a time.

This is very very good for the economy.

A very drastic move. Massive numbers of businesses & people will be put a lot of inconveniences. Hope the Govt doesn't back down and takes this decision to its logical conclusion :):thumbs up

Now we know what PM meant by this warning.

There is no limit on how much cash you can deposit. If you hadn't declared the black money before Sept 20th deadline, now you are forced to declare it and pay tax on it.

If someone has, say, rupees 1 crore as black money with him hidden somewhere, he gotta find many relatives and friends considering that only 7 weeks are left before 31st Dec and max per person can convert is 20000 a week.

Are the new notes made of plastic ? Any idea anyone ?

This is really a bold move by the NaMo govt. Hope this weeds out all the black money.
I guess a lot of people just lost their sleep tonight :D

Quote:

Originally Posted by Sherlocked (Post 4089131)

No there is no limit as such to deposit the amount in bank or post office accounts from 10th November till 30th December. However there will be a limit on withdrawal of Rs 10000 per day and Rs 20000 per week. This limit will be increased in coming days.

Quote:

Originally Posted by Sherlocked (Post 4089131)

That limit is on withdrawal, not deposit. If you have 1 crore, you can deposit, but it will become white, and will be considered taxable income for this year.

Now this is what you call a game changer. I'm wondering what to do with 20,000 cash - so I can only imagine what people with bag fulls of black money must be thinking tonight :uncontrol

But I have a feeling that this move might create an independent, parellel economy of these extinct notes. Is it possible?

Quote:

Originally Posted by DragonHawk (Post 4089135)

No there is no limit as such to deposit the amount in bank or post office accounts from 10th November till 30th December. However there will be a limit on withdrawal of R week.

Quote:

Originally Posted by Samurai (Post 4089136)

That limit is on withdrawal, not deposit. If you have 1 crore, you can deposit, but it will become white, and will be considered taxable income for this year.

Thanks for correcting! Yup, this makes more sense.:)

Quote:

Originally Posted by samaspire (Post 4089137)

But I have a feeling that this move might create an independent, parellel economy of these extinct notes. Is it possible?

No. Currency doesn't work like that, they won't have value unless somebody (central bank) underwrites the currency.

Quote:

Originally Posted by Samurai (Post 4089136)

That limit is on withdrawal, not deposit. If you have 1 crore, you can deposit, but it will become white, and will be considered taxable income for this year.

Not just that - there could be (and I hope, will be) questions asked about the source of the money by the authorities. And income generated through corruption will be difficult to explain.