LPG distributors, railway caterers, chemists, and ticket counters at Archaeological Survey of India monuments will be allowed to receive payments in the old Rs. 500 and Rs. 1,000 notes, the government announced on Wednesday. It said those depositing over Rs. 10 lakh of unaccounted income in their accounts would face tax and a penalty of 200 per cent under the Income Tax Act.
Banks, which are scheduled to open on Thursday, will remain open on Saturday and Sunday as well for the convenience of people who need to exchange their high-value currency notes.
Penalty for tax evasion“If an amount of above Rs. 10 lakh is deposited in a bank account, not matching with the declared income, the same will be treated as tax evasion,” the Finance Ministry tweeted on Wednesday, attributing it to Revenue Secretary Hasmukh Adhia.
“In such a case, the tax amount plus a penalty of 200 per cent of the tax payable would be levied as per Section 270(A) of the Income Tax Act.
The RBI has dispensed Rs. 2,000 denomination currency notes to banks in large boxes and asked them to ration the distribution of those from their branches. For at least two weeks, notes of such a denomination will be only made available from branches and not from ATMs.
ATMs, which will resume operations on Friday, will dispense notes only in the denomination of Rs. 100 and Rs. 50 for the next few days.
Large lenders like State Bank of India and ICICI Bank have decided to extend branch banking hours. In some locations, ICICI Bank branches will remain open from 8 a.m. to 8 p.m. on Thursday and Friday.
“The government has extended the exemption list for payment with old Rs. 500, Rs. 1,000 notes to metro tickets, toll plaza payments, LPG gas cylinders, railway catering, ASI monuments, and chemists,” Finance Minister Arun Jaitley told a press conference on Wednesday.
‘A big step towards cashless economy’Finance Minister Arun Jaitley on Wednesday said “the demonetisation move is a big step to maintain international credibility.”
Addressing a press conference here, Mr. Jaitley said: “It is also a big step towards a cashless economy. The move will also give a significant setback to the parallel black economy because it will force money outside the system to enter the system.”
He pointed out that the majority of people now have bank accounts under the Pradhan Mantri Jan Dhan Yojana, and that it was a few minutes’ work to get those accounts for those who did not have them yet. “This is not an immunity scheme,” he said. “Those who have lawful money have nothing to fear, and those with unlawful money will be treated as per the Income Tax Act.”
He said there could be no comparison between this demonetisation move and the one carried out by the Janata Party in 1978 when Rs. 1,000, Rs. 5,000 and Rs. 10,000 notes were demonetised since the scales involved then were far smaller than what is seen today. “The economy and the black money economy was much smaller then (in 1978),” Mr. Jaitley said. “High denomination notes were also a very small part of the overall circulation then, making up less than 10 per cent. Today, high denomination notes make up 86 per cent of overall circulation.”
He said there was no connection between the move and the upcoming Assembly polls. in various States.
