[Eddy]

Originally Posted by msdivy

Post amnesty scheme, they have pay around 70% including the fine, lose the anonymity factor and hence can be questioned for the source of wealth.

70% ? Didn't know this. Where is it mentioned ?

[srishiva]

They should think about how not to allow black money to come into circulation again. This takes care of cash hoarded until now not the future.

For people who have converted cash to real estate (not sure anything can be done for gold), there should be a mechanism to go after real estate and find the sources. Guys in real estate already wear rings and chains all over their body and no one cares for its source.

[sunishsamuel]

Originally Posted by binand

There might be very stringent conditions for approval, since I am hard-pressed to think of valid reasons to claim that electronic means wouldn't work for my purpose.

I think it is extremely unlikely that Rs. 2000 notes will be filled in ATMs - with daily & weekly withdrawal limits, the amount of hard cash you can take out of these machines is going to be quite limited (I now have a debit card with daily cash limit of 50K; going forward it will be 10K with a 20K weekly limit apparently).

For long i have hated carrying cash. Its a pain. And i am one among them who got very excited about digital payments becoming a reality. And i'd say that should be the norm going forward. For small traders and hawkers, have them use systems like paytm instead of dealing in cash and the change that they need to carry. For the big ones use bank transfer etc. This way no money goes unaccounted.

However, i do not think the issue of corruption and bribe will be addressed with this. Instead of taking money, the new found option will be electronic gadgets, gold (which probably is the favorite already) or something else. And that needs firm steps like these.

I am not a fan of any party (anymore) but i will support good intentions and good governance. This decision (to de-monetize) 500 and 1000 rupee notes are in the right direction and i hope government will encourage more digitization of work flow in government offices, financial transactions to get the virus of greed and corruption out of the society. I will be happy to see the tax paid by me is used to fill the stomach of the needy not of the greedy.

[lambuhere1]

Not sure if the images of new bills is listed here.

Sharing the same for reference.

Source : finmin.nic.in

[msdivy]

Originally Posted by Eddy

70% ? Didn't know this. Where is it mentioned ?

Once of the CAs mentioned this on TV.
The penalties are listed here - http://www.incometaxindia.gov.in/cha.../penalties.htm
Depending on the case, it could be 70% or even 90%.

[comfortablynumb]

Originally Posted by binand

...since I am hard-pressed to think of valid reasons to claim that electronic means wouldn't work for my purpose.

What you say is true for us urban dwellers (that too not all), but for the overwhelming majority of our countrymen who live in semi-urban and rural areas, it is primarily a cash driven economy. It took quite a while for ATM usage to gain acceptance in these areas, so e-commerce, online bill payment etc. is still a long way away.

Actually, come to think of it, even we (as a family) use quite a bit of cash frequently for making purchases from the local vegetable and fruit vendor, for autos, doctor (GP) fees etc. I don't think these folks will be in any hurry to install card swiping machines for their businesses

Cheers,
Vikram

[asingh1977]

Originally Posted by CA Dhruv

How do you define something illegal? It's not Bhagvat Gita that has made laws of our nation. These are man made rules. So these are just views of some people who are in power. I agree with the point that not all black money is easy money. If say a service person, like a salloon owner has not declared some of his income that doesn't mean that he has earned it in a easy way. He has worked for it and thus earned it.

Fact of hard life: undeclared income == falsely earned money. That is what all this is trying to curtail. A whole plethora of shop keepers and cash transaction undertaking populace never pay taxes or cook their books big time. We get a lot of months to file taxes, why do people refrain. What are your views on paying taxes (irrespective where it is going)..?

Originally Posted by Samurai

It does not eliminate black money because most of it is stored in gold and real estate. I am still awaiting more details on how they are going to address it. They must have thought about it, we just don't know what the plans are.

These two markets might fall. Real-Estate is heavily banked on Black-Money. The black glut in the middle, will not move and prices will have to drop. Loss to the black money holders entrenched deep in RealEstate. Though gold went up 4K today..! Of all things. BlackMoney has highly inflated RealEstate prices in many zones (but it is not that easy), and their will be an influx (higher) of inventory and people not willing to pay prices + refusing BlackMoney payments. But ya, as you said: they must have plans to address gold and RealEstate.

Originally Posted by CA Dhruv

The taxes you pay go into the hands of politicians who through one way or other transfer that out of the govt. treasury.
Since we are an automotive forum a bigger question, how is one supposed to pay toll taxes in case he doesn't have RFID tags? Also how would large trucks carrying essential items move? How are they going to pay taxes?

It is going to be highly painful next 60-80 days..!

[Nav-i-gator]

Originally Posted by comfortablynumb

What you say is true for us urban dwellers (that too not all), but for the overwhelming majority of our countrymen who live in semi-urban and rural areas, it is primarily a cash driven economy. It took quite a while for ATM usage to gain acceptance in these areas, so e-commerce, online bill payment etc. is still a long way away.

Actually, come to think of it, even we (as a family) use quite a bit of cash frequently for making purchases from the local vegetable and fruit vendor, for autos, doctor (GP) fees etc. I don't think these folks will be in any hurry to install card swiping machines for their businesses

Cheers,
Vikram

On the other hand, people will move to shops which offer card payment facility, and those who do not have this will lose business.

[rrsteer]

There is nothing but a lot of +ve for the salaried class.

- Property prices will asymptote to rationality. NCR folks rejoice (the kingpin of black market). If u were planning to buy property, good times ahead.

- A lot of savings are going to be routed to capital markets now. The market is depressed today, but it will rebound strongly. As funds come in - fears of a bubble will not be misplaced. But Indian capital markets are going to do well

- PSU banks - they are gonna be big beneficiaries here. Hopefully they are gonna start rolling and trigger the larger economy into business

- Inflation is going to be reigned in.

I am political agnostic, I lean left as soon as I close my laptop and sit under the shade of a tree and I certainly hate the chest thumping proud nationals on TV. But.. Ache Din are coming! This was hit out of the park.

PS: And people worrying about the other great event today - a distinctly possible Trump presidency. Let me allay your fears by saying if that happens, the two greatest nations in this world (India, US) would now be governed not by intellectual idiots.

Please do take time to read: https://medium.com/@nntaleb/the-inte...577#.ijllg64wi

[hybridpetrol]

Very bold move! While it has become a habit in our country that the Governments heavily tax the middle class in the name of doing good for the poor, while the money is channelled to the corrupt officials and politicians / businessmen as black.
Now, for the first time in decades, the taxpayer can rejoice, and take pride in paying the tax and being clean, as we have nothing to hide.
We can take pride in maintaining our accounts clear, and for the fact that every rupee that we have earned has gone to our bank accounts linked to PAN and thus are pure white.
We can be proud for being an Indian and being a clean hand.
It is a very surprise move and all the more surprising because such a big step is executed without a hint of such news before PM's announcement. This actually puts more faith in the system, which was believed to have only corrupt officials who take bribes and sell even their mothers.
I mean, think about it - if the new Rs.500 and Rs.2000 are already ready, it cannot be printed by PM alone. It should have been printed at factories in the last few weeks / months, where employees like you and me work. The notes should have been packed transported to different cities all over India by road / rail / air, where people work at packaging, loading, shipping, unloading, and unpacking. This network of people who has known the information has guarded the secret, and played a big role in catching the black money holders by surprise.

These and the future are the good days our PM promised in 2014, especially for us, taxpayers!

[Eddy]

Originally Posted by CA Dhruv

how is one supposed to pay toll taxes in case he doesn't have RFID tags? Also how would large trucks carrying essential items move? How are they going to pay taxes?

Old notes to be accepted at all toll booths till 11th midnight.

[SmartCat]

Originally Posted by hybridpetrol

I mean, think about it - if the new Rs.500 and Rs.2000 are already ready, it cannot be printed by PM alone. It should have been printed at factories in the last few weeks / months, where employees like you and me work. The notes should have been packed transported to different cities all over India by road / rail / air, where people work at packaging, loading, shipping, unloading, and unpacking. This network of people who has known the information has guarded the secret, and played a big role in catching the black money holders by surprise.

It's very likely that the first lot of new bank notes were printed outside India.

[Sawyer]

Originally Posted by hybridpetrol

if the new Rs.500 and Rs.2000 are already ready, it cannot be printed by PM alone. It should have been printed at factories in the last few weeks / months, where employees like you and me work. The notes should have been packed transported to different cities all over India by road / rail / air, where people work at packaging, loading, shipping, unloading, and unpacking. This network of people who has known the information has guarded the secret, and played a big role in catching the black money holders by surprise.

I agree. It is a remarkable, even brilliant feat, like the time when India went nuclear. But that was a lot fewer people to manage/control in terms of keeping it a secret and a surprise.

One can only pray that all the necessary follow up - and I am not referring to the logistics of the next few weeks - is done equally effectively.

[hemanth.anand]

Originally Posted by comfortablynumb

The processes and restrictions have been in place for a while now, not just for a few months, and still we see a huge chunk of black money flowing in the economy. That's why I was wondering about the efficacy of this move if they are again going to introduce high denomination notes.

Starting afresh is the tough thing here. all these years, the processes and restrictions were there but people who only dealt with cash could not be included in it. It was like two economies and both running on same currency. Now since that currency is no more and they will have to operate within the process. The short timeframe is difficult to convert the existing ones to new ones without being noticed

Never underestimate the loophole finding capability of an Indian;

This I agree. time will tell what the Intelligent black money hoarders will come up with.

the only thing that might help is their being printed in limited numbers.

Correct, This is also one factor.

Originally Posted by tharian

The new notes will be put into circulation from November 10th.
The same reason why banks and ATM's are shut so they can stock up the new notes.

AFAIK, ATM machines will be cleared of all 500/1000 rupees notes and stocked with 100 rupee notes only and not new notes. That's why there is a limit of max 2k per transaction from tomorrow

[speedmiester]

Originally Posted by smartcat

It's very likely that the first lot of new bank notes were printed outside India.

Why would India print it's currency outside India.
This is all done in their own presses.

The first lot of the Rs 2000 notes has been dispatched from currency printing press in Mysore.

http://www.india.com/business/2000-r...rency-1636857/