Post office savings accounts allow deposits of Rs.500/1000 notes
People can deposit the now invalid Rs.500 and Rs.1000 denomination currency notes in their Post Office savings accounts, the Finance Ministry said on Wednesday. A Post Office Savings Account offers interest of 4% per annum on individual or joint accounts. Such accounts can be opened with an amount as low as Rs.20.
Sacks full of burnt money found in Uttar Pradesh
Within a day after PM Modi announced that Rs.500 and Rs.1000 notes would be discontinued, sacks full of mutilated and burnt notes were found in Bareilly in Uttar Pradesh. The remains of the notes were sent to the RBI to check their authenticity. While the government's move to curb black money has been widely debated, we explore its effects on certain sections of society.
Housewives, small businessmen etc given relief from harassment
Revenue secretary Hasmukh Adhia announced that housewives would face little to no scrutiny while depositing excess household cash or piggy bank savings in high denomination notes in bank accounts. The same courtesy would be extended to small businessmen, artisans and workers alike. Therefore, such groups would be able to deposit amounts up to Rs.2.5 lakhs without facing harassment from the Income Tax department.
So when will the Income Tax department step in?
The Income Tax department, during the period from 10th November to 30th December 2016, would be getting information about all cash deposits in every account above the threshold of Rs.2.5 lakhs. The Income Tax department would then cross check such amounts with the income certificates of the respective depositors. Any anomaly would be treated as tax evasion and consequently penalized.
The penalty for black money
Cash deposits disproportionate to the income of the depositor "would be treated as the case of tax evasion and the tax amount plus a penalty of 200% of the tax payable would be levied as per Section 270(A) of the Income Tax Act," Adhia said.
Indians find ways to hide black money through gold, tickets
People have started booking railway tickets and cancelling them to get the reimbursements to hide the black-money. Others have been trying to swap it for gold (at 20-65% higher rates). The IT officials have found Rs.42 crore unaccounted gold stocks with jewellers during raids.
70-year-old dies after standing in queue to exchange money
The demonetization of Rs.500 and Rs.1000 notes has cast a death sentence on black money but in its wake, a 70-year-old man from Mulund died after suffering a cardiac arrest while he stood in a long queue outside SBI Branch.
Bank, ATM queues longer, Jewellery sales under scanner
Thousands of people lined up outside banks and ATMs today, as yesterday's bank holiday left citizens stranded without cash; people were disgruntled over banks being shut at a time when cash availability was at a low. Meanwhile, the government has put all recent jewellery sales under the IT scanner in an attempt to tighten the noose around black money hoarders.
Demonetization woes continue across India
In Assam, due to a shortfall of Indian currency, Bhutanese currency is being used as legal tender. According to reports, areas near the Bhutan border in the Kokrajhar district are using Bhutanese currency. An Indian note of Rs.500 is exchanged for Rs.400 worth of Bhutanese currency, whereas a Bhutanese Rs.500 note maintains its face value.
Some respite, more worries after demonetization
The government allowed dispensing cash of up to Rs.2,000 through debit card swipe at 2500 petrol pumps; LIC extended the date for premium payments in light of the cash crunch. Stoking controversy the ACB nabbed two Kandla Port Trust officials in Kutch for accepting Rs.4 lakh bribes in Rs.2000 notes. Meanwhile, a manager from Rohtak's Cooperative Bank died after working for 3-days straight.
IT Dept monitoring large deposits
Sources revealed that the Income Tax department is monitoring bank deposits and is in the process of flagging abnormally large transactions. Notices have been issued to individuals and firms including NGOs who have deposited Rs.2.5 lakh or more, asking for source details and IT returns for 2 years. It has asked NGOs to show their cash deposit records as on 8 November, 2016.
More relaxations for demonetization rules
The RBI has put a substantial portion of the 16,368 million pieces of soiled notes of lower denominations, back into circulation. After receiving operational guidelines from RBI, banks may allow withdrawal of Rs.2.5 lakh by the families with upcoming weddings from next week. Meanwhile, the IT department has warned that depositing unaccounted money in others bank accounts will attract a 7.5 year jail term.
People's problems continue
An inmate in Sabarmati jail asked for bail so he could go to the bank to exchange old Rs.500, Rs.1000 notes lying in his house. In Pune, an infant girl passed away after a hospital refused to accept partial payment in old Rs.500, Rs.1000 notes.
Odisha bank loses Rs.1 crore of old currency
Approximately Rs.1.15 crore of defunct Rs.500 and Rs.1,000 notes were found missing from the Odisha Gramya Bank's branch in Dhenkanal. According to the inspector in charge, bank officials discovered the same when the bank was opened after the two-day weekend. SP Basant Kumar Panigrahi of Dhenkanal said, "We are examining the CCTV footage."
Only 10% cash replaced so far reveals RBI
Data from the RBI has revealed that the government has only managed to replace around 10% (Rs.1,36,000 crore) of the cash that was made illegal overnight on 8 November. In addition, data revealed that banks have received old notes worth over Rs.5,44,000 crore since the move. Meanwhile, a currency exchange racket was busted in Andhra Pradesh, recovering Rs.6,80,000 in old and new notes.
Temples asking devotees to convert cash
Temples have begun asking devotees to help convert old currency. Several Jain temples in Mumbai have asked devotees to take between Rs.25,000-50,000 in cash from the temple trust and return it interest free next year in new notes.
Customers can withdraw money from Big Bazaar
According to an announcement made by Big Bazaar, 24th November onwards, all its stores including Fashion Big Bazaar (FBB) will allow customers to withdraw up to Rs.2,000 using their debit/ATM cards. 258 Big Bazaar and FBB stores from 115 cities and towns across India will have this facility. State Bank of India (SBI) has helped Big Bazaar for the same.
