[SilentEngine]

Originally Posted by SDP

1. Get 4000/4500 in old notes from someone and get them exchanged from bank. Get paid 300 Rs for exchanging 4500 Rs.
2. Stand in queue as a proxy for someone and as the counter comes close, make a call and then that someone stands in queue for last few minutes. Again get paid something like 300Rs from each 'customer'.

The 2nd mode is still OK, but the first one is a clear fraud.

First one - it's something that can be frowned upon - but under which law can it be considered a fraud?
General salaried class (like me), who get their pay credit in our accounts electronically are not worried about our next monthly pay (excluding those whose source of income is business). Our inconvenience is very small compared to those who earn their daily wages in cash, and if their employers are not paying them for regular work (or if there is no regular work), why should they not earn some commission this way?

[rdhawan15]

Originally Posted by mayankk

Dont be so detached. I am yet to see anyone in line with a positive opinion.

Well, if majority people in the queue have political leanings, there ought to be a negative opinion. Surely, the decision could have been taken in a better way to ensure that ground preparations were made before acting on the demonetization. And, people definitely are inconvenienced and have a sound reason to complain about the execution part of demonetization.

However, for anyone to say that the intent behind demonetization is not positive for the country in the long term is taking it a little bit too far. Unless of course the complainants themselves have oodles of cash that they are unable to dispose of to their own personal and familial benefits.

[Sawyer]

Originally Posted by msdivy

If somebody has huge cash pile, IT,ED has to prove it is indeed black.

The landlord in your case (who has never declared his income before) might deposit 5 crores cash. IT can question him. No way he will be found guilty because IT won't be able to prove his source of income as illegal.

Demonetization might affect few but it won't solve black money problem, corruption.

The only benefit of demonetization is weeding out fake currency.

You make some good points, but some corrections to each sentence above:
1. If a huge cash pile is discovered, the law puts the burden of proving that it is tax paid/legitimately owned on the owner of the pile. Once that is done, it is no crime. In a reversal of how things are in criminal law, here it is a case of guilty unless proved to be innocent.
2. Again, the landlord will have to correlate the deposit and prove it arose from tax paid income. Burden of proving is on the landlord, not on the IT dept.
3. Demonetization alone will not solve the referred problems, many other things also need to be done alongside that, in both the short term and the medium term.
4. Weeding out fake currency is a definite benefit, but it is too soon to say that it is the only benefit.

[mayankk]

Originally Posted by rdhawan15

Unless of course the complainants themselves have oodles of cash that they are unable to dispose of to their own personal and familial benefits.

Again, extremely loaded.
So, its not just "black" cash, but even having "oodles" of cash an issue? Why?
How I hold my money is not the government's business. At least let me deposit it or exchange it in peace.
Work for a living, work again to get your money. Wau!

[sachinpk]

Originally Posted by SDP

If old notes are not a legal tender at a white goods shop, wouldn't they accepting old notes in exchange of white goods amount to barter trade? How would this be different from a scenario where I walk into the same white-goods shop and offer a bag full of potatoes in exchange for a memory card and the shop agrees to that trade?

I guess Sawyer has given the legal information. The Rs.500 & Rs.1000 notes would be accepted till Dec 31st, 2016. I mean a common man, can still deposit these currencies into their bank accounts. The bank would ask for some ID proof so that the tax department can come to you to ask any questions. Now you may ask then why do people queue up to this "currency exchange" (Rs.4500/day). They are trying to get these notes exchanged byepassing the accounting system of the bank (as that would leave an audit trail).

The shop keepers and many private business establishments do NOT accept Rs.500 & Rs.1000 notes, because if they accumulate a huge lot of them they will have some issues on Dec 31st, 2016. They will have to show some proof on how they got so much cash. The only proof they can show is their own sales records. Then they are shooting in their own foot, because that would expose their actual sales turn over (many folks cook up the sales turn over to lower figures). So what do they do, boycott these notes.

Originally Posted by msdivy

If somebody has huge cash pile, IT,ED has to prove it is indeed black. Have disproportionate assets is not a crime in India.

Being filthy rich is not a crime in India. But not paying legitamate tax dues on that fat money is an offence. Any unaccounted money is "black".

Public servants, elected representatives declare their assets, file returns. Companies are audited. In these cases, IT can question the sources of income, compare to previous years

Sir, this declaration of asset is a one-way street. That is; the assessee fills in every single detail and show x amount as his income. So a person who wishes to show a lower income (to pay less tax) would just not show the actual figures here. That being the case, how do you think IT,ED can figure out the person's actual income? Either by scrutinising their entire life (including accounts), raiding their places and then digging up excess cash/gold etc. Here when this demonitisation happened it was the black money holders job to worry on how to show all this excess cash (income) as all procured using legal means. They can still weasle out a little by showing it is income from agriculture or some thing like that. CAs may know some means. But none of them are going to get out 100% scot free.

The landlord in your case (who has never declared his income before) might deposit 5 crores cash. IT can question him. No way he will be found guilty because IT won't be able to prove his source of income as illegal.

Well in that case, my land lord could have deposited the money in his account itself right? Why was he hiding the 5 crores cash deposit? Why was he keeping away from the banking system? That is because IT department does not work in the way you describe. They would use this to prove that my land lord had "assets exceeding the known sources of income". And that becomes an offence. So the easier way out is to make this 5 crore money untraceable in any official accounting system. One simple way was to have a safe at home and dump the money. But then this government played spoil sport. Now the money has to get into a bank to remain valid.

If anybody demands 1 lakh bribe, the giver will have to withdraw Rs 50,000 every week for 2 weeks and pay. The receiver has 1 lakh black money in new notes

The existing laws would still remain. The bribe taker can still be caught for "assets exceeding the known sources of income". A government servant has his official financial history pretty much out in the open.

Originally Posted by Sawyer

I accepted these notes myself, for the sale of my motorcycle, after the demonetisation, so I am not just preaching theory.

And you would then be able to deposit it in a bank account till Dec 31st, 2016, and if any one questions the money source the sale deed/bills on your motor cycle is enough. I remember reading about a fish monger who continued to take Rs.500 notes. He seemed to know the rule better than many of the more literate crowd. The fish monger said that he knows how much his daily turn over his. He would just deposit the money in a bank and show it as his sales. He was not trying to down play the sales figures to pay less taxes even before.

[Sawyer]

Originally Posted by sachinpk

And you would then be able to deposit it in a bank account till Dec 31st, 2016, and if any one questions the money source the sale deed/bills on your motor cycle is enough. I remember reading about a fish monger who continued to take Rs.500 notes. He seemed to know the rule better than many of the more literate crowd. The fish monger said that he knows how much his daily turn over his. He would just deposit the money in a bank and show it as his sales. He was not trying to down play the sales figures to pay less taxes even before.

Exactly

If the more educated and literate people, and the media understood what the fish monger does, there would be less of the panic and chaos we are seeing on the streets today. Everyone has been carelessly using the word "banned notes", inaccurately. Withdrawing of legal tender status is NOT the equivalent of banning these notes.

You have only read of the fish monger; I know a chemist that does this because he is in my locality. And he doesn't do this in a hidden way, under the counter, he does this openly and gives a bill of current date. And a vegetable vendor also does the same, openly - no bill of course. Because no one can take any action against him, under any law/rules in force in India. The only problem these people have is not sometimes having enough change to return because suddenly that change has become scarce. Which is the problem for the new Rs 2000 note as well, funnily enough. For old notes and new, no change means some jugaad has to be employed for now.

More sanity and less hysteria would help.

[m8002?]

Originally Posted by sachinpk

I remember reading about a fish monger who continued to take Rs.500 notes. He seemed to know the rule better than many of the more literate crowd. The fish monger said that he knows how much his daily turn over his. He would just deposit the money in a bank and show it as his sales. He was not trying to down play the sales figures to pay less taxes even before.

Isnt this a grey area that is still under debate. If the fish monger can deposit the old Rs.500 notes as daily sales, why not the white goods retailer or jeweller? My understanding is that jewellers can no more deposit old Rs.500 and 1000 notes telling its sales from last month.

Atleast I feel, one should not be dealing with the old currency anymore for any transaction other than the ones allowed by the govt like medicine, utilities and fuel.

[rdhawan15]

Originally Posted by mayankk

At least let me deposit it or exchange it in peace.

There is no rush as you got more than 40 days left for the same. You got ample time to do so. In the next couple of weeks, you would see most ATMs operating to their capacities in dispensing Rs. 2000 and Rs. 500 notes. That would take off the pressure a bit.

My suggestion for you would be to let the initial heat settle down as it would save time for all those looking to deposit their hard-earned oodles of cash into the Banks.

[Eddy]

Guys, please be polite even in disagreement. Posts with personal attacks and political undertones will be deleted and accounts infracted.

Thank you - Support Team

[mayankk]

Originally Posted by rdhawan15

There is no rush as you got more than 40 days left for the same. You got ample time to do so. In the next couple of weeks, you would see most ATMs operating to their capacities in dispensing Rs. 2000 and Rs. 500 notes. That would take off the pressure a bit.

My suggestion for you would be to let the initial heat settle down as it would save time for all those looking to deposit their hard-earned oodles of cash into the Banks.

Thanks.
To be fair, I am not even in that much of a bother. All my transactions are card based. Those which were not, now use options which are. Thanks for maintaining a civil tone.
What really rankles me how people choose to ignore the obvious hardship people are facing due to what may be a good decision, but implemented with high-school fete level of organization. Someone who's entire life's savings is in a small Pan-bahar box as 500-1000 rupee notes will obviously be in panic.
Most of the junta at the banks and the ATMs are hand to mouth, daily wagers.
I downloaded Paytm on my maid's phone. Transferred the salary to her bank account. Now she has to spend another 50 bucks for data. Thats a fair share when your cumulative salary is 6000 rupees. The next hurdle is she is illiterate. Now what?

[rdhawan15]

Originally Posted by mayankk

Thanks.
That really rankles me how people choose to ignore the obvious hardship people are facing due to what may be a good decision, but implemented with high-school fete level of organization.

Agree that the execution was ill-planned. But, the intent is good and eventually this is for everyone's benefit. Such a massive move to new notes would definitely have issues during transition. But, once we are migrated to the new notes, things would become better for you and me.

So, why not give it a chance and be patient during the transition? Even in a normal business, transition periods are always associated with pain and confusion. I suggest we give some time for this to work out the intended consequences and things may turn better. If not, next elections are due in 2019 !!!

[SDP]

Originally Posted by SDP

There was a news report (sting operation) where it was revealed that lots of daily-wages workers (don't want to generalize ... this was in a specific area in Delhi) are standing in bank queues as a full time job since last Wednesday. Two modes of operation:
1. Get 4000/4500 in old notes from someone and get them exchanged from bank. Get paid 300 Rs for exchanging 4500 Rs.
...

The 2nd mode is still OK, but the first one is a clear fraud.
...

Originally Posted by avira_tk

...the first one is clearly legal, you are getting paid for a service you provide, coming from the labour class doesn't disqualify anyone from making use of their time in this fashion,

....

Originally Posted by SilentEngine

First one - it's something that can be frowned upon - but under which law can it be considered a fraud?
...

Yes, its a 'service' they are providing and charging for the service.
When one provides a service, he/she does 'something' for the customer. That 'something' has to be legal. Prostitutes and contract-killers ("supari") also provide a 'service' and get paid for it. Are those services legal, specifically in India?

The 'service' we are talking about here is called 'money laundering' and is definitely illegal.

[akshay380]

I heard from quite few sources that plan was to do this in March but had to be preponed due to info leaking out about new 500 and 2000 notes getting printed. In that case I'll give govt some space in the interest of larger good.

[poloman]

Originally Posted by mayankk

Thanks.
To be fair, I am not even in that much of a bother. All my transactions are card based. Those which were not, now use options which are. Thanks for maintaining a civil tone.
What really rankles me how people choose to ignore the obvious hardship people are facing due to what may be a good decision, but implemented with high-school fete level of organization. Someone who's entire life's savings is in a small Pan-bahar box as 500-1000 rupee notes will obviously be in panic.
Most of the junta at the banks and the ATMs are hand to mouth, daily wagers.
I downloaded Paytm on my maid's phone. Transferred the salary to her bank account. Now she has to spend another 50 bucks for data. Thats a fair share when your cumulative salary is 6000 rupees. The next hurdle is she is illiterate. Now what?

A citizen has every right to store his wealth in every form he desires, no doubt in that. But no where else in the world you will find this attachment for cash. This habit has to change if the country has to progress. Half of country's GDP will be idle in cash stockpiles, gold and unused lands. Only 3% file returns and half of that pay any tax. Don't you think all these reflect very poorly on our hoarding culture? How long you plan to maintain this status quo? What is the government going to gain by inconveniencing general public? I am surprised by the empathy shown by the so called privilege class to the poor in a country where half may not even know the name of their maids. A clever ploy to shoot from shoulders of poor to get political mileage.
Supposedly 35% of people in this country is below poverty line and hardly earns $2 dollars a day. But what now we hear is even 4000 a week is not good enough. This is a country where a business man earning 5Cr will have his name in BPL card.

In Kerala there is a NRK in almost every house hold. In some areas the entire money they transfer is invisible to the system. They use hawala channels to handover the money to their relatives in Kerala and straight away the entire money gets deposited in a co-operative bank, with no questions asked. A ordinary salaried person in the state has to compete with these kind of people for resources.

Edit: Went out for lunch. The deflationary shock imposed by this step is unbelievable. Even the regular pan wallah has reduced the prices from 20 to 15 for want of customers. Not to mention about vegetables.

[sachinpk]

Originally Posted by m8002?

Isnt this a grey area that is still under debate. If the fish monger can deposit the old Rs.500 notes as daily sales, why not the white goods retailer or jeweller? My understanding is that jewellers can no more deposit old Rs.500 and 1000 notes telling its sales from last month.

The difference is that the fish monger is more honest . He knows exactly how much he would get as his sales value, and perhaps may have been depositing similar amounts all this while. In December also he goes with pretty much the same sales turn over, deposits it and walks away. IT department would just check if there is any major discrepancy in the deposit pattern. The fish monger is confident that they would not find any discrepancy, because he has been honest all the while.

Now for a jeweller life is not simple. What has happened is that lot many black money hoarders went and purchase large amounts of golds. They paid in Rs.500 & Rs.1000 notes. Now the jewellers would have to show their actual turn over when they have to go and deposit the same. They would be forced to tell why so much Rs.500 & Rs.1000s with them. Some deals, they may be able to back date the billing date, and say that it was purchased a few days before Nov 8th. IT & Sales Tax would then ask for the stock position registers. Many jewellers also have unaccounted Gold. That would also get exposed. The original plan was that jewellers etc. should not accept these notes. Because government knew that people would try out "high value purchase" & gold was the easiest one. But jewellers went ahead and allowed the sale. The government threatened them of raids, and then did carry out the raids. The jewellers ran to the bank. One major jewellery group in KL has closed down for last 3-4 days.

As for other mid-time shop keepers (stationary et.al). They also do not report their actual sales volume. So that they can fudge on VAT, CST and very many other taxes. Many others (like caterers & priests) who provide their services also do not even report most of their income received for doing "service". Those people would get trapped if they are paid using Rs.500 & Rs.1000.

Originally Posted by mayankk

Someone who's entire life's savings is in a small Pan-bahar box as 500-1000 rupee notes will obviously be in panic.

If people were honest (and that is a big IF), this "some one" could have used the exchange scheme (Rs.4500 worth new notes) to tide over his immediate cash requirements and then start using a bank account. If there are people who hold all their savings in 500-1000 Rs. notes in their own homes, their biggest threat is not the government but burglars. I do understand that there are poor people who needs to be helped. But their entire cash worth is not really high. But what we see today is that lots of rich people crying over the "poor people" in order to have this operation scuttled. At present the "hardships" are high lighted time and again, and who does this mainly? Media and political groups who have their own vested interests and wants to retain the black money sources.

I downloaded Paytm on my maid's phone. Transferred the salary to her bank account. Now she has to spend another 50 bucks for data. Thats a fair share when your cumulative salary is 6000 rupees.

In my family we have a maid who is semi-literate, and a kind of odd-job man who is illiterate. When we came to know of this, what we did was to distribute some 100s which we had as their salary advances. Our own stuff we could manage (through online payments for me, and wifey works in the bank any ways). This may not be the perfect solution, but there are small measures which we can use to help genuinely poor people.

Originally Posted by poloman

In Kerala there is a NRK in almost every house hold. In some areas the entire money they transfer is invisible to the system. They use hawala channels to handover the money to their relatives in Kerala and straight away the entire money gets deposited in a co-operative bank, with no questions asked. A ordinary salaried person in the state has to compete with these kind of people for resources.

+1 to that. Just a few hours back there was a case of car toppling head over in Southern Kerala. The driver did not even try to check the vehicle condition, but ran away with two bags. We can take a guess on what was inside the bags. Kozhikode police seized 62 lakhs worth of unaccounted money yesterday. Day before that it was the time for Thrissur Police and Palakkad Excise teams to seize around 40 lakhs of unaccounted money. One old woman who tried to deposit Rs.37000 lost the entire money (it was all counterfeit) and got a good police case on her now. She now whines that the money came through hawala route.

In KL, the situation was so bad that unless you had shady business deals buying even a cent of property was a night mare. It is quite known that there were groups operating who were buying land on a you name the price, we have it kind of deals. All this was done in cash. Now the illegal pawn brokers who had usury interest of 13-15% daily interest is now trying to dispose some of their illgotten wealth at lower intrest rates.

To be honest, I also feel that at least in KL the advertisement sources of media outlets needs to be verified. "Follow the money"; should be the motto. Their reports would certainly be in favour of their main advertisers.