Government scraps Rs 500 and Rs 1000 notes!

[sushantr5]

Originally Posted by akhil_007

Does this apply only for exchange? I m planning to deposit the 1000's to my account and then withdraw using ATM/bank teller. Can I deposit money multiple times into my account?

You can do whatever while depositing. You can deposit as many times as you want, as much as amount you want.

[Chetan_Rao]

Originally Posted by akhil_007

Does this apply only for exchange? I m planning to deposit the 1000's to my account and then withdraw using ATM/bank teller. Can I deposit money multiple times into my account?

Yes, exchanges are limited to ensure everyone gets a chance (esp. people who don't have bank accounts), but you can deposit as many times into your account as you want as long as you meet the scrutiny criteria. You can withdraw at your leisure.

[gthang]

Interesting how people are used to bandh days called on the whims of political parties.

Those are accepted as mild inconveniences while real mild inconveniences are trumped up as pandemonium.

Wish the Government had done this before Diwali so that the environment could also have been saved.

Cheers.

[Sherlocked]

A query for tax experts and CAs:

Is it possible to convert some chunk of your undisclosed money into white by depositing the same in your bank account now and then subsequently revising your ITR Return of A.Y. 16-17.
This way can someone save on the 200% penalty by just paying the additional tax on the "now disclosed" money?

P.S. For my troubled relatives and neighbours.

[sdp1975]

Watching India Today TV right now where the reporter armed with a hidden cam is showing how the "worthless" old notes are being exchanged :

- Hawala operators asking for 25-30% commission for converting into new currencies.

- Jewellers in Chandni Chowk willing to provide jewellery and bullion for old notes, going rates are 50k for 10 gm.

- Real estate agents taking old notes for realty deals. One of them was bragging of a businessman from Moradabad who sent in 5 Cr.

Originally Posted by Sherlocked

A query for tax experts and CAs:

Is it possible to convert some chunk of your undisclosed money into white by depositing the same in your bank account now and then subsequently revising your ITR Return of A.Y. 16-17.
This way can someone save on the 200% penalty by just paying the additional tax on the "now disclosed" money?

P.S. For my troubled relatives and neighbours.

A revised return is meant to correct inadvertent mistakes. Immunity from prosecution and penalty is not available for intentional falsifications. There are judicial precedents on this.

[Sawyer]

Originally Posted by Zappo

If they deposit these old notes everyday IT will catch them for dealing in scrapped currency.

Accepting the scrapped notes voluntarily isn't illegal; all that has changed is that refusing to accept them earlier was illegal, now it isn't so.
Those that accept them and deposit them will have to satisfy the IT folks that these are in line with the income declared in the IT return, so if a supermarket is honest in the income tax it pays, it will not face any problems.
For that matter, even petrol pumps can choose to accept these or not accept these after the extended deadline for them expires, but if they refuse to do so before the deadline expires, they will get into trouble. Obviously again, on the basis that income tax is being paid to the extent it is due.

[JLS]

Originally Posted by blacksport

.....

I read somewhere that the PM was advised by somebody from an NGO to take this drastic step. While it is fine that our leaders take their ideas from wherever the deem fit, if the leaders themselves lack understanding of economics and market forces, such fiascoes are bound to happen.

I think some NGO advised our PM and he implemented this decision without consulting finance minister, any IAS officer, any RBI officials - just took advise from NGO and implemented - fill it, shut it, forget it. And of course as he does not have any understanding of economics and market forces at all - such fiascos are bound to happen.

Originally Posted by blacksport

It wouldn't hurt if we reserve our highest offices to people with some real education (real degrees). Even a written test of elementary grade would help. We even have to take a written test for getting a learners licence, while any tom dick and harry with a sharp enough tongue can get a licence to handle our most important office.

......

Actually we should reserve PM position only for persons with PHD degree and that too from certain special collages (will JNU do ?)
Then we can make an exception to the rule that persons from so and so dynasties also will be eligible for PM post.
How can somebody whose name is spelt differently at two places, can acquire sharp tongue and use it to reach PM position and cause few days hardship to people in name of addressing black and fake money - totally unacceptable, we should raise a complaint in United Nations and International Court.

Hope this will meet your expectations sir.

JLS

[FrozeninTime]

Originally Posted by akhil_007

Does this apply only for exchange? I m planning to deposit the 1000's to my account and then withdraw using ATM/bank teller. Can I deposit money multiple times into my account?

Yes it applies only to exchange. You can deposit money in your account multiple times but withdrawal using ATM is futile exercise as there is limit till November of 4000 rupees. Plus ATM is running out of money. A large number of ATM around Whitefield were closed today due to lack of cash.

[SilentEngine]

Originally Posted by FrozeninTime

You are allowed to exchange cash once only in these 50 days. These smart people tried to exchange money from different banks and some even tried to exchange money from same person they dealt yesterday. Isnt it a case of trying to fool the system ?

Same rule is being interpreted differently in different banks/branches! See below comment from Divya Sharan who has exchanged twice.

Originally Posted by Divya Sharan

Not quite! I exchanged ₹6000 in the last 2 days from the same branch using the same ID documents.

Originally Posted by Sawyer

Accepting the scrapped notes voluntarily isn't illegal; all that has changed is that refusing to accept them earlier was illegal, now it isn't so.
Those that accept them and deposit them will have to satisfy the IT folks that these are in line with the income declared in the IT return, so if a supermarket is honest in the income tax it pays, it will not face any problems.
For that matter, even petrol pumps can choose to accept these or not accept these after the extended deadline for them expires, but if they refuse to do so before the deadline expires, they will get into trouble. Obviously again, on the basis that income tax is being paid to the extent it is due.

There is a problem with this, isn't it?
If many such honest super markets start accepting old notes, then everyone can go about their daily life as if nothing happened, and in last week of December go to bank and exchange or deposit. But importantly, this provides an easy path to those struggling to convert their black money by allowing to them make multiple high value transactions in such stores without getting caught, making this whole exercise waste of time!

[binand]

Originally Posted by blacksport

I read somewhere that the PM was advised by somebody from an NGO to take this drastic step. While it is fine that our leaders take their ideas from wherever the deem fit, if the leaders themselves lack understanding of economics and market forces, such fiascoes are bound to happen.

It wouldn't hurt if we reserve our highest offices to people with some real education (real degrees). Even a written test of elementary grade would help. We even have to take a written test for getting a learners licence, while any tom dick and harry with a sharp enough tongue can get a licence to handle our most important office.

Oh yes, there are many claimants for this idea:

1. Arthakranti, a Pune-based NGO: http://www.firstpost.com/business/rs...y-3098904.html
   
2. Chandrababu Naidu: http://timesofindia.indiatimes.com/c...w/55323928.cms
   
3. Akila, a Gujarati newspaper: http://www.telegraphindia.com/116111...p#.WCU2h-F97Vo (they are not claiming credit, though).
   
4. A professor from IIMB: http://www.thehindu.com/todays-paper...cle9331368.ece
   
5. This chap:
6. 

Guess what? There will be many more such claimants. And as for the rest of your comment - I personally think it is the kind of elitism that Mani Sankar Aiyar and the rest of the Lutyens gang professes; mostly from their frustration.

Mind you, the way it is playing out right now - I think there is a real risk that the scheme will backfire, mostly because the banks are totally unprepared. I think they completely underestimated the logistical problem of making sufficient quantities of smaller denomination currencies available.

[freedom]

Originally Posted by Sherlocked

A query for tax experts and CAs:

Is it possible to convert some chunk of your undisclosed money into white by depositing the same in your bank account now and then subsequently revising your ITR Return of A.Y. 16-17.
This way can someone save on the 200% penalty by just paying the additional tax on the "now disclosed" money?

P.S. For my troubled relatives and neighbours.

Its tricky. If you declare it in IT, you will get asked "how did u earn this" which will then lead to a 200% penalty incase you are not able to justify the income.

Assuming there is no valid reason and source of income,
For every 1 cr you (I mean they) will endup paying 85 lacks as tax and be left with 15L odd white money.

Why so much tax? Well, these people had a chance under IDS to pay 45% tax and get on the right path. Since they bypassed that offer, they will end up paying tax+200% penalty

Though this whole mechanism is not water tight, the escape router are few and far. And yet there are ways to catch someone at a later time.

I do expect the real crack down to start after April 2017.

Everyone I am meeting in office is super delighted with the move. Its getting fashionable to be honest.

I went to ATM today and got money in 20 mins flat. It would have been 10 mins if people had shown some civic sense and not withdrawn money with multiple card once they went into the room.

I will give them benefit of doubt and just assume they needed more than 2K.

Mind you, 4-5 ATMs in that area were not functional and everyone had queued at this 1 ATM. People were greeting each other, helping out and what not. Not one person was cribbing.

[sansvk]

Yesterday evening I went to my bank ATM which is close to my office. It was just like any other day walked out in 5 mins with 20 notes of Rs 100. Most smaller ATMs were shut down.

[JLS]

Originally Posted by binand

........Mind you, the way it is playing out right now - I think there is a real risk that the scheme will backfire, mostly because the banks are totally unprepared. I think they completely underestimated the logistical problem of making sufficient quantities of smaller denomination currencies available.

What makes think you that banks are totally unprepared?


The post below, few other posts and also what I see in local news etc. do not point to aggravating situation - rather it gives impression that things are settling down.

Originally Posted by freedom

I went to ATM today and got money in 20 mins flat. It would have been 10 mins if people had shown some civic sense and not withdrawn money with multiple card once they went into the room.

I will give them benefit of doubt and just assume they needed more than 2K.

Mind you, 4-5 ATMs in that area were not functional and everyone had queued at this 1 ATM. People were greeting each other, helping out and what not. Not one person was cribbing.

[Chetan_Rao]

Originally Posted by JLS

......
Actually we should reserve PM position only for persons with PHD degree and that too from certain special collages (will JNU do ?)

Hope this will meet your expectations sir.

Excuse me for responding to something not addressed to me.

While the post your were responding to was probably unwarranted in targeting a particular office, yours isn't any less so.

Targeting particular people in govt. aside (which doesn't achieve anything, esp. in today's polarized Us Vs. Them climate), expecting people in government offices to meet some sort of educational and sensibility criteria isn't an unrealistic or unreasonable expectation. These people are making decisions (legislative, economic, sometimes constitutional) that affect our lives and futures, why shouldn't we be concerned whether they're actually equipped to make such decisions?

Again, this isn't about any ONE person, it's about the whole bunch across the nation in government offices.

[condor]

Originally Posted by binand

Oh yes, there are many claimants for this idea:

Also - Baba Ramdev had suggested this in 2011.