New Delhi, Nov 9 (PTI)
Finance Minister Arun Jaitley on Wednesday said deposits of now-defunct old Rs
500 and Rs 1,000 currency notes in bank accounts will not enjoy immunity from
tax and the land of law will apply on source of such money.
A day after the
government announced the withdrawal of Rs 500 and Rs 1,000 banknotes in the
country's biggest crack down against black money, corruption and counterfeit
currency, Jaitley said old higher-denomination currency notes have to be
deposited in bank accounts to get newer or smaller denomination currencies.
"But it should be
clear that it is no immunity scheme.This (deposit) does not provide any relief
from taxation. The law of land will apply (on source of fund)," he said.
"If the money is
legitimate which had been previously withdrawn from bank or earned legally and
saved and had been disclosed, there is nothing to worry about," Jaitley
said.
But if it is illegal
money, source will have to be disclosed and if it is a crime money, or bribe
money, then it is trouble, he told DD News.
The Finance Minister
further said that housewives and farmers with genuine savings need not worry
about depositing cash in their bank accounts.
"The small amounts
that people will deposit like Rs 25,000, 30,000 or 50,000 lying in house for
expenses, whatever money could be there for meeting normal family expenses they
need not worry. They can go to banks," he said.
The Finance Minister said
for first one or two weeks replacements may be less but after 2-3 weeks as more
currency notes come in market then normal replacement will be available.
The move would help make
more and more transactions become digital, he said, adding now people will
disclose income and pay taxes. "India will become a more tax compliant
society."
Jaitley said that people
who have accumulated black money, crime money or bribe would suffer after this.
"There is a premium
now that this decision has created on honesty and dis-premium on
dishonesty," he added.
"Obviously there are
some inconvenience for a couple of days or couple of weeks but those
inconvenience cannot be alibi that India continues to live (with black money
and parallel economy)," he said.
The decision would bring
more transactions under tax net and both direct and indirect taxes would move
up. Reduction in parallel economy would increase the size of formal economy,
Jaitley said.
Stating that the decision
would have its ramifications on politics as well, Jaitley said some political
funding has started by cheques and if this step can do some cleansing, it would
be a great move.
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