[earthian]

Originally Posted by drmohitg

Black money is not going anywhere, atleast not with just this one measure.

No one said that this is the only move. I hope you heard our PM speak on this. And i am not blind, nor trusting. This is a one way street that our PM has embarked upon. Only option is to keep going forward. I expect more steps. I have mentioned some of them in my earlier posts. The next step, according to my limited knowledge and vision, would be to enforce KYC on all properties. It would take some time, but would ensure that no transactions are possible if KYC is not complied with. ( in the future). Maybe they would also link it to Aadhaar .

[m8002?]

Let me take the case of a typical "aam aadmi" here. This is a distant relative of one of my colleagues. Works as a manager in a small private company. Earnings mainly through salary. Got two teenage daughters. Trying to save as much money as possible for a good education and marriage of the daughters. Cannot get more "aam" and this.
The guy bought a piece of land for 5/6 lacs ages ago and 2 months back sold it for 70+ lacs. And guess what, the property was registered for guidance value of 30 lacs and our guy is now sitting with 40+ lacs in 1000 Rs notes totally clueless. He has gone into severe depression now.
Purely from a point of law, this guys is sitting on tons of black money. From his point of view, he did what everyone else was doing but he gets the shaft.

The biggest impacted guys are those who did property transactions in the last couple of months because they couldnt convert the cash into something.

Folks keep mentioning that the black money is all converted already. Are you guys telling that all the Jan Dhan accounts that have started getting in 2.5 lacs suddenly are savings that the account holders are putting in?

On the high denomination notes, I feel the govt should not print 1000s and gradually reduce the printing 2000 over a period of time, then completely stop it. What would happen is that the notes will automatically reduce from circulation since it will be again used for hoarding and illegal ( drugs, arms, etc) activities. Then they can simply demonitize that too.

[earthian]

Originally Posted by m8002?

And guess what, the property was registered for guidance value of 30 lacs and our guy is now sitting with 40+ lacs in 1000 Rs notes totally clueless.

I don't think there is any law/rule that states that you cannot sell the property for more than the guidance value ( i trust this is the same as jantri value, a term common in Gujarat) The jantri value or rate, ensures that the registration of the property and stamp duty payment is not lower than what the jantri states.
Obviously, he sold the property to save on stamp duty ( if shared) and since the buyer may have insisted on part black payment. This is precisely why the need to eradicate black money is important. Over a period of time, the black transactions, which initially were limited to a callous few, have now become an integral part of any transactions including basic needs of the common man.
I sympathise with your friend. But the system has shafted him. We need to change this so that other "common" folks don't face the same issue in the future.

[Turbanator]

we are managing the daily wages or some small funds for workers by taking money at 12% monthly interest from the local finance guys as of now; just to make sure that these families get their daily bread

Without getting into your intentions or options available, I believe carwatcher has suggested a workable alternative to paying interest, this way you can give some food or other required stuff to your labour.
Another option will be to buy pre-paid debit cards from Bank, we gave Rs 2000- 5000 value cards recently to our employees who don't have debit or credit cards.

[Sawyer]

Originally Posted by m8002?

Purely from a point of law, this guys is sitting on tons of black money. From his point of view, he did what everyone else was doing but he gets the shaft.

Yes, he gets the shaft. He won't get any sympathy on this forum.

But why aren't you asking the broader question: why does almost every Indian that has the chance to do so, do what he is doing? There is nothing great about being honest because you did not have the opportunity of being dishonest.

Is it that Indian citizens are unique in this world of being dishonest and cheats? Something in our genetic make up?

And are salaried Indians that pay tax via TDS, all honest tax payers by willing choice?

And that governments aided by the bureaucracy that have ruled India since independence have earned the moral right to punish them for things like this person has done?

Trust breeds Trust and Honesty breeds Honesty, while Dishonesty breeds Dishonesty. Cast the stones at where the breeding has been done.

[binand]

Originally Posted by earthian

I sympathise with your friend. But the system has shafted him.

The system ended up shafting him because he tried to shaft the system. He who lives by the sword, dies by the sword. I have little sympathy for him and his ilk.

In any case, someone with assets worth 70L is hardly an "aam aadmi" - however chimerical the definition is.

[m8002?]

I had put out the details not to get sympathy for that person but show how common black money has become in the economy. If you had met this person on the road riding his 2 wheeler and standing in queue at the atm, you would have not have guessed that he has 40 lacs of black money in a safe at home. And there are millions like him where the money will come out now.
I totally agree that this one step will not remove black money but needs follow up actions and more importantly a change in mindset.


What this has created is an awareness among people what black money is. The other important thing is that it has reduced the funding for terrorists, arms and drugs. There has been huge collateral damage and time will tell if it was worth it or not.

[drmohitg]

Originally Posted by m8002?

Folks keep mentioning that the black money is all converted already. Are you guys telling that all the Jan Dhan accounts that have started getting in 2.5 lacs suddenly are savings that the account holders are putting in?

Exactly. So these Jan Dhan accounts are all an outright form of money laundering. Touts have hired these accounts at a fixed rate of commission to the account holder. Also I personally know of rich people who have a workforce of lets say 50 people in their factories. All these workers have rented them their accounts and also of their relatives for a mere promise of 5-10% and have also surrendered their cheque books and original ID cards as security. So these accounts are one of the many ways how ultimately people are converting their black money into white. But I have a feeling the government is going to make it very tough to access these accounts openly and without any question. Also there was a whatsapp message doing the rounds ( don't know the authenticity) that the government was mulling to take away all the benefits from such Jan Dhan account holders like BPL cards etc. since according to them a person with savings of 2.5L into their accounts do not qualify for these benefits. I would be really happy if they do this. But in the end the poor will suffer as they will not know what hit them. The money from their accounts will vanish since the tout/rich guy will withdraw it post December. And at the same time the government might withdraw their names from the list of people who were benefitting from Government schemes for the poor.

[m8002?]

Just saw this on rediff:

http://news.rediff.com/commentary/20...c603a6a29e54ae

The govt seems to be trying all possible means. Could it have been better prepared? Definitely. Let's hope things turn for the better.

[ramzsys]

Originally Posted by m8002?

our guy is now sitting with 40+ lacs in 1000 Rs notes totally clueless. He has gone into severe depression now.

Please convince him to deposit it all and let the IT department decide on the penalty. Hope he is not knocking the wrong doors.

In another perspective, it is not all bad because in current market he may actually be getting something not far from his white money.

IT can also summon the guy who got hold of the property and ask for the source of funds for buying the property.

[400notout]

Originally Posted by m8002?

Let me take the case of a typical "aam aadmi" here.

I guess since he has sold the property, he is anyway due to file capital gains if he hasnt re-invested in property. Just ask him to get a good CA who will guide him with the Taxman on how to settle the remainder amount. More than the taxman its social and peer pressure of being seen in possession of "black money of such large amounts" that will eat the guy. What surprises me is common people are paranoid and do not keep such huge amount of money at home.

Originally Posted by Sawyer

Yes, he gets the shaft. He won't get any sympathy on this forum.

But why aren't you asking the broader question: why does almost every Indian that has the chance to do so, do what he is doing? There is nothing great about being honest because you did not have the opportunity of being dishonest.

Is it that Indian citizens are unique in this world of being dishonest and cheats? Something in our genetic make up?

And are salaried Indians that pay tax via TDS, all honest tax payers by willing choice?

And that governments aided by the bureaucracy that have ruled India since independence have earned the moral right to punish them for things like this person has done?

Trust breeds Trust and Honesty breeds Honesty, while Dishonesty breeds Dishonesty. Cast the stones at where the breeding has been done.

Very clear words. This reminded me of the joke " virginity is not dignity rather a lack of opportunity"

Originally Posted by binand

The system ended up shafting him because he tried to shaft the system. He who lives by the sword, dies by the sword. I have little sympathy for him and his ilk.

In any case, someone with assets worth 70L is hardly an "aam aadmi" - however chimerical the definition is.

Actually 70L after selling land is pretty much loose change considering todays property prices. However we cannot excuse breaking a red light just because others do so. When caught the excuse of "sab aisa kar rahe hai" doesnt work.

[drmohitg]

Originally Posted by ramzsys

Please convince him to deposit it all and let the IT department decide on the penalty. Hope he is not knocking the wrong doors.

Lets keep honesty aside from this discussion as if that was such a strong attribute then we would not have landed up in this situation and the above person in our example would not be sitting on the 40L cash.

Now having done what he did, why on earth would he declare it. 30% tax and 200% penalty means he will pay a total sum of 36L to the government and will be left with just 4L. He can easily get the same converted into new currency and taking the maximum conversion rate of 40% also, he will still be left with a handsome 24L in new currency. This is the reason why I have been advocating all along that the government should have brought out the Amnesty scheme again with this mega decision. Even at an increased rate of lets say 50%, many such people would have happily paid that in tax and lived in peace than continue to use illegal ways to convert their ill-gotten wealth and then stay stressed arming themselves to fight the next government measure that might come.

[VKumar]

Originally Posted by Sawyer

for the replacement of all 80% of the flow to work its way into the economy and take effect will take a lot longer than for 80% of the currency to be replaced. People seem to have faith that the other flow of money - paperless - will see the economy and them through; I don't have that faith. The foundation of the Indian economy is still visible cash.

Actually they could have implemented it in a systematic way. What was needed was a surprise element? Cool, they could have introduced new notes, upgraded the ATM machines etc everything. And then drop the bomb one night that older notes are of no use now. It would have been good enough to at least injure if not kill two birds with one stone; they aren't still able to kill them though.

Originally Posted by earthian

Ok, shall give my full attention to you....

Man, you have some sort of in-built humor in that post

Seems you are not so "poor" then. Maybe you used it as a figure of speech maybe?

There is a political saying "Always speak less than necessary". I have done my part with that particular word. Now open the dictionary (It's a Sunday, you must be having enough of the free time), check all the meanings of that word and fit the one you find appropriate here.

That's a shame. Hopefully you have credit and debit cards, i am sure?

I don't have a credit card sir. I am a poor man, debit cards do for me because my expenses are well controlled (I have only a Polo petrol on my name)

Please hire some good assistants. I am sure you can afford it. There could have been better ways to get that transformer moving from Lucknow.

It seems that you are a good manager, please suggest me any other reliable, quick and cost effective method of the same.

It has not started backfiring, but some elements are trying their damnedest to paint a scenario that it has.

Let's talk after 25th over this if it is backfiring or not.

The Government is trying to remove black wealth from the economy. This seems to be the first step.

Take a stand; it 'seems' or it 'is' or 'you don't know'? Because half stories and half truth always get the convict out.

Edit: 16:30 pm: Again talked to another contractor.......not such a big deal as is being made out.

The trucks we are talking about are the the ones which don't follow a single prescribed route daily. I request you to go through the following piece of news; eagerly waiting to hear your take over this:
4.5 million trucks stranded on Indian roads, says transporters' union

Originally Posted by carwatcher

This is as dramatic a post as I have ever seen in few news media.

I shows how far you are from ground reality.

Just by making some arrangement with some wholesaler or big shopkeeper whom you could make payment via bank for groceries would've been enough to help your labour getting their daily bread and saved yourself from arranging for some cash. If you can't find any and get loan at such high rate also indicates how 'poor' you claim to be.

Now we have one guy here shouting 'our PM - our PM' but don't even know what plans that PM has executed and now you also joined it. When I have clearly mentioned that "I have to make a distribution station (power house in layman terms) functional", that means the place has no electricity. Now the place that has no electricity; you expect there a grocery wholesaler? The area mentioned in the post is surrounded by a national park and electrification of villages is being carried out under Deen Dayal Upadhyaya Gram Jyoti Yojana. People get into tractor and trolleys there and go to any nearest towns to get the daily provisions. Additionally in the current situation; I would love to meed the provisions store owner who is providing things on credit. Even they also are facing cash crunch and are unable to even properly refill their stocks.

That's why I said; far from ground reality.

@Drmohitg who is working in a govt. hospital may have seen the situations like what I am talking of. No basic facilities and people are somehow living in these places.

Originally Posted by drmohitg

My point is simple. Black money is not going anywhere, atleast not with just this one measure. You can argue all you want but I am sorry to break your bubble. This conversion is out in the open.

100% agree (This thread has no thanking option, this statement deserves one). Black money is indeed being brought into either circulation or being converted into commodities. As I already said "far from ground realities". The situation is much far from being ideal and one can even get to see in news that builders are also doing '10 ka 6' and adjusting black money of people.

I am trying to say is that do not become blind in your support and in this nationalist wave going on.

Indeed, a blind support will not head anyone anywhere.

The only small issue is that the government didn't think of this through and left too many loopholes to allow money laundering which then makes this whole exercise pointless.

As I said, government hasn't been able to kill two birds with a stone but has definitely caused the injury. There definitely will be a good amount of infusion of liquid money into the system and revenues are also bound to grow.

Originally Posted by m8002?

The guy bought a piece of land for 5/6 lacs ages ago and 2 months back sold it for 70+ lacs. And guess what, the property was registered for guidance value of 30 lacs and our guy is now sitting with 40+ lacs in 1000 Rs notes totally clueless. He has gone into severe depression now.

That's the difference between 'aam aadmi' and seasoned players. Adjusting 40 lac IMO doesn't take even 40 hours if the person is seasoned. Won't go into much details else mods will make proper adjustments in me for sure

Folks keep mentioning that the black money is all converted already. Are you guys telling that all the Jan Dhan accounts that have started getting in 2.5 lacs suddenly are savings that the account holders are putting in?

Would prefer to keep mum on this one. Would just say that these jan dhan accounts etc are the last dumping stops when all other points are already overloaded.

reduce the printing 2000 over a period of time, then completely stop it. What would happen is that the notes will automatically reduce from circulation since it will be again used for hoarding and illegal ( drugs, arms, etc) activities.

100% agree, the 2000 rupee notes have already started finding their place. Few are willing to accept them at small shops etc because of the issue of change but they are a blessing in disguise for the hoarders etc.

Originally Posted by Turbanator

Without getting into your intentions or options available, I believe carwatcher has suggested a workable alternative to paying interest, this way you can give some food or other required stuff to your labour.
Another option will be to buy pre-paid debit cards from Bank, we gave Rs 2000- 5000 value cards recently to our employees who don't have debit or credit cards.

Explained the reason above with the name of the plan under which yours truly is working as a poor electrical contractor.

Originally Posted by Sawyer

Trust breeds Trust and Honesty breeds Honesty, while Dishonesty breeds Dishonesty. Cast the stones at where the breeding has been done.

That's not possible because in that case the jails will not be able to accommodate even a fraction of the convicts. Heck, who will put them in jails? Cops?

Originally Posted by binand

In any case, someone with assets worth 70L is hardly an "aam aadmi" - however chimerical the definition is.

What if his asset that was worth 5 lakh yesterday has become 50 today then?

Originally Posted by m8002?

there are millions like him where the money will come out now.

There are quite few of them, only the innocent aam aadmi.

Originally Posted by drmohitg

But in the end the poor will suffer as they will not know what hit them.

This is exactly what my point it. It is the poor who are suffering now and they only are going to suffer the worst.

Originally Posted by ramzsys

Please convince him to deposit it all and let the IT department decide on the penalty. Hope he is not knocking the wrong doors

The amount mentioned can be adjusted. This guy needs to act a bit smartly and he can end up turning it all into white with hardly 15-20% to be paid as tax.

Originally Posted by 400notout

I guess since he has sold the property, he is anyway due to file capital gains if he hasnt re-invested in property. Just ask him to get a good CA who will guide him with the Taxman on how to settle the remainder amount.

100% correct piece of advise, getting depressed is not going to help. There are 40 days still left, enough of the time for adjusting even 400, they are just 40.

Very clear words. This reminded me of the joke " virginity is not dignity rather a lack of opportunity"

100% true and applicable in this case.

Originally Posted by drmohitg

Now having done what he did, why on earth would he declare it. 30% tax and 200% penalty means he will pay a total sum of 36L to the government and will be left with just 4L.

As per what I was talking to my CA, in this case the total tax + penalty should come out to be around 30 lac itself.

This is the reason why I have been advocating all along that the government should have brought out the Amnesty scheme again with this mega decision. Even at an increased rate of lets say 50%, many such people would have happily paid that in tax and lived in peace than continue to use illegal ways to convert their ill-gotten wealth and then stay stressed arming themselves to fight the next government measure that might come.

If such an abrupt action wasn't taken then amnesty scheme would have gone ignored.

[Turbanator]

Now the place that has no electricity; you expect there a grocery wholesaler? The area mentioned in the post is surrounded by a national park and electrification of villages is being carried out under Deen Dayal Upadhyaya Gram Jyoti Yojana. People get into tractor and trolleys there and go to any nearest towns to get the daily provisions. Additionally in the current situation; I would love to meed the provisions store owner who is providing things on credit.

Unfortunately, many of us have got disassociated from the India that still lives in these conditions, I can visualize your problems now after you mentioned in details. It appeared earlier that you are referring to Noida/ NCR. I think Government should do away with limits on withdrawals. They are not doing over the counter exchanges beyond a value and that too now only once, so why should someone who has money in his account get only partial money. If they don't have enough new currency then it's going to be a big issue.

[mrvenka]

Originally Posted by VKumar

Actually they could have implemented it in a systematic way. What was needed was a surprise element? Cool, they could have introduced new notes, upgraded the ATM machines etc everything. And then drop the bomb one night that older notes are of no use now. It would have been good enough to at least injure if not kill two birds with one stone; they aren't still able to kill them though.

Think again Sir your logic might not work. If new 2000/500 Rs was introduced early people would have been selling it at a premium to black money holders . and there would be one more exchange happening in black. I believe that the 4.5K/2K limit is not because there is shortage of currency, its to ensure significant amount of money gets through banking system and not just an exchange over the counter.