India

IT Dept expands list of transactions under scanner

20 Jan 2017 | Written by NewsBytes Desk; Edited by Supriya
Demonetization: Key developments

The IT Department has expanded the list of financial transactions under scrutiny, now including deposits up to Rs.2.5 lakh made during the demonetization period.

Meanwhile, analysts said demonetization has led to a 15-20% dip in health care spending. Retail drug sales also witnessed a dip.

Experts said the initial hesitation among hospitals to take demonetized currency could be to blame.

In context: Demonetization: Key developments

28 Dec 2016Demonetization and events that followed

Prime Minister Narendra Modi announced demonetization on November 8, 2016.

Since November 8, PM Modi is his speeches at public rallies has urged the public to bear with temporary inconveniences keeping in mind the long term goal of eradicating black money and cleansing the system.

Since then there have been several developments and multiple policy changes.

Here are the key developments.

HurdlesNew currency notes

The RBI began to issue new notes of Rs.2000 and Rs.500; however given that there was limited availability of smaller denomination notes, people were inconvenienced with notes of Rs.2000.

Even new notes of Rs.500 ran into some hurdles as there were multiple instances of printing errors.

According to latest reports, printing presses have now increased printing capacity of Rs.500 notes to mitigate shortage.

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Going the cashless way

HowGoing the cashless way

To encourage people to make cashless payments, the government announced discounts on purchases of petrol, diesel, buying railway tickets, paying insurance premium and reduced charges levied on online transactions.

It doubled the permissible balance in mobile wallets to encourage users to try e-wallets like Paytm.

Earlier this week, daily and weekly lucky draws have also been announced as incentives for consumers.

DetailsTaxman cracks down

3500 notices have been sent by tax officials to various entities for alleged hawala dealing and tax evasion.

Raids were conducted across cities at residences of senior government functionaries and well connected businessmen leading to discovery of massive amounts of new currency and unaccounted money.

IT-department will also initiate action against 70 lakh people who made high-value transactions but didn't file tax returns.

WhyBenami property holders under scanner

PM Modi announced that the government would go after benami property holders next.

According to statistics, only 6% of black money is held in cash and the remaining makes its way to real estate, gold and other investments.

The new Benami Act was passed on November 1 under which benami transactions are now prohibited; violations are punished with imprisonment and confiscation of property.

20 Jan 2017IT Dept expands list of transactions under scanner

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26 Jan 2017Old note exchange possible again?

Government sources stated that citizens will be given another opportunity to exchange the demonetized 500 and 1000 notes. However, this time the exchange will be only for limited amounts of cash.

Government source asked to "hold on to those notes as we are examining another window for genuine people."

Officials said the new window will only be for small amounts.

30 Jan 2017Limits on ATM cash withdrawals to cease 1st February onwards

According to a statement issued by the RBI, cash withdrawal limits placed on withdrawals from Current accounts/Cash credit accounts/Overdraft accounts stand withdrawn with immediate effect.

The statement also says that 1st February onwards, cash withdrawals from ATMs will have no limits.

Limits on withdrawals from Savings Bank accounts however, will continue and are in consideration for being withdrawn in the near future.

08 Feb 201725% ATMs running dry in India

Bank officials said that due to large scale withdrawals at the start of the month, over 25% of the ATMs in the country are without cash.

Officials said that payday for over 560 million workers in the unorganized sector could have also contributed to the cash shortage.

However, authorities have stated that the shortage in cash should become better by 10 February.

08 Feb 2017No cash withdrawal limits from March 13: RBI

The RBI announced that all cash withdrawal limits on bank accounts would be lifted from March 13. Cash withdrawal limits for savings accounts has been raised to Rs.50,000 until 20 February.

The limits had been imposed due to demonetization and the subsequent shortage of currency in the country.

Earlier, withdrawal limits for current accounts were removed on 1 February.