CA. M. Lakshmanan

From the reports, it is seen that people who have lot of unaccounted money in the form of old Rs. 500 and Rs. 1000 notes have resorted to so many clandestine ways to convert their holdings. Since lower denominations of Rs. 100 and Rs. 50 are in short supply the dates for acceptance of the old notes are being extended for specified category of business community to mitigate the trouble of common man in filling fuel in Petrol Stations, getting LPG, purchasing Milk, travelling by Govt. transport buses etc., It is an open fact that these centres are being used for conversion in a big way by people who are in power either through middleman or directly. Till the new Rs. 500 and other lower denomination notes are freely available the Government cannot stop this and the colour of the money will not change. But it will be in the form of new Rs. 2000 or lower denominations from Rs. 100. Majority of the exempted business community, either it is Government Organization or Private Enterprise, the deposits they make in their account are in the form of Rs. 500 or Rs. 1000 only irrespective of their collections since they are being converted before depositing into the Bank. If the dates are going to be extended again and again majority of the unaccounted money would be converted for which there is no check and the sole purpose of demonetization will be defeated.

Every account holder is used as scape goat for depositing the un accounted cash. Every such individual is made to believe that nothing would happen if they deposit up to Rs. 2.5 Lakhs in their account, which has not seen even Rs. 10,000/- at a time in the past. They simply oblige to help known people with or without commission. If any proceedings are initiated by the Income Tax Department against these depositors it would cause undue hardship to genuine depositors also. Already the depositors who have deposited more than Rs. 2.5 Lakhs are fearing that they may be subjected to heavy penalty.

From the above it is feared that the colour of Money may not change as expected.

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One response to “Demonetization and Clandestine Cash Conversions”

  1. Mahendra says:

    Huge amount of black money going white through this route easily by high hands but a tax payer salaried employee is fearing to deposit even one lac in cash .

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