New Delhi, Nov 10 Finance Minister Arun Jaitley on Thursday inaugurated two-day Economic Editors' Conference-2016 in New Delhi.
While inaugurating the conference he said nobody would be harrassed over smaller deposits -- less than Rs 2.5 lakh -- as people began thronging banks nationwide to exchange or deposit Rs 500 and 1,000 currency notes that have been demonetised.
We are trying to ensure at the earliest requisite replacement currency is available to ppl; believe that no need to rush in initial days: FM— ANI (@ANI_news) November 10, 2016
Banking Dept, RBI has taken all necessary steps to keep banks open to the extend necessary; it has been kept open on weekend too: FM Jaitley pic.twitter.com/IAX5iE72Pd— ANI (@ANI_news) November 10, 2016
Banking dept & RBI has taken some measures & extended their working hours, banks will be open on weekends as well: Arun Jaitley— ANI (@ANI_news) November 10, 2016
"Nobody will face questions or harassment for small deposits," Jaitley told reporters while inaugurating the two-day Economic Editors Conference here.
It is only those with large amounts of undisclosed money who will have to face the consequences under existing laws: FM Jaitley pic.twitter.com/mHtLk17Ft1— ANI (@ANI_news) November 10, 2016
There will be an impact on small purchases for a few days, till there is adequacy of currency, but it is beneficial in long run: FM Jaitley pic.twitter.com/dUfzq57WR4— ANI (@ANI_news) November 10, 2016
"It is only those with large amounts of undisclosed money who will have to face the consequences under existing laws," the minister added.
He said people might face problems initially but in the medium to long run they will definitely benefit from the government's policy of demonitising large currency notes in a bid to curb corruption, unaccounted wealth and terror financing.
For few days people might think that they are facing problems, but in long run they will definitely benefit: FM Arun Jaitley pic.twitter.com/rt6Fp82I7C— ANI (@ANI_news) November 10, 2016
This decision (scrapping of Rs 500/1000 notes) will impact the spending habits of people: Finance Minister Arun Jaitley pic.twitter.com/tayhnmrp4c— ANI (@ANI_news) November 10, 2016
The denominations ceased to be legal tender from midnight on Tuesday.
CEA Arvind Subramanian, too answered questions on demonetisation. This is what he had to say on it:
"Instead of seeing it as a reduction of wealth, it must be seen as transfer of unaccounted wealth."
"It should be seen as a transfer of this unaccounted wealth from private sector to Govt and public sector, which will boost economy."
Shaktikanta Das, Economic Affairs Secretary, had this to say at the conference:
"Process was on for the last few months; only 2-3 people in RBI were involved in designing of notes."
"In next few months Rs 1000 notes will also be brought in with a new dimension and design."
"All denomination of notes will be reintroduced with new design and new features."
"Let me make it clear, legal tender status of existing Rs 100, 50 & other denomination notes will continue to be legal tender."
"From time to time, new series of notes with new features and designs will be infused in the market."
Revenue Secretary Dr. Hasmukh Adhia too answered questions relating to action by Income Tax Department in respect of old currency deposited in banks.
A lot of small businessmen, housewives, artisans, workers may have some cash lying as their savings at home, will the income tax department ask questions if the same is deposited in banks?
Such group of people as mentioned in the question need not worry about such small amount of deposits up to Rs.1.5 or 2 lacs, since it would be below the taxable income. There will be no harassment by Income Tax Department for such small deposits made.
Will the Income Tax Department be getting reports of cash deposits made during this period? If so, will the current threshold of reporting requirement of reporting cash deposits of more than Rs.10 lacs will only continue?
We would be getting reports of all cash deposited during the period of 10th November to 30th December,2016 above a threshold of Rs. 2.5 lacs in every account. The department would do matching of this with income returns filled by the depositors. And suitable action may follow.
Suppose the department finds that huge amount of cash above Rs.10 lacs is deposited in a bank account, which is not matching with the income declared, what would be the tax and penalty to be paid on the same?
This 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 the section 270(A) of the income tax Act.
It is believed that a lot of people are buying jewelry now, how does department plan to tackle this?
The person who buys jewelry has to give his PAN number. We are issuing instructions to the field authorities to check with all the jewelers to ensure that this requirement is not compromised. Action will be taken against those jewelers who fail to take PAN numbers from such buyers. When the cash deposits of the jewelers would be scrutinised against the sales made, whether they have taken the PAN number of the buyer or not will also be checked.