In a historical move that will add record strength in the fight against corruption, black money, money laundering, terrorism and financing of terrorists as well as counterfeit notes, the Government of India has decided that the five hundred and one thousand rupee notes will no longer be legal tender from midnight, 8th November 2016.

The Government has accepted the recommendations of the RBI to issue Two thousand rupee notes and new notes of Five hundred rupees will also be placed in circulation.

Notes of one hundred, fifty, twenty, ten, five, two and one rupee will remain legal tender and will remain unaffected by the decision today.

Prime Minister Shri Narendra Modi made these important announcements during a televised address to the nation on the evening of Tuesday 8th November 2016. He said that these decisions will fully protect the interests of honest and hard-working citizens of India and that those five hundred and one thousand rupee notes hoarded by anti-national and anti-social elements will become worthless pieces of paper.

The Prime Minister said the steps taken by the Government would strengthen the hands of the common citizens in the fight against corruption, black money and counterfeit notes.

Fully sensitive to some of the difficulties the common citizens may face in the coming days, the Prime Minister has announced a series of steps that will help overcome the potential problems.

Persons holding old notes of five hundred or one thousand rupees can deposit these notes in bank or post offices from 10th November onwards till 30th December, the Prime Minister announced. There are also some limits placed on the withdrawals from ATMs and bank for the very short run.

Shri Modi stated that on humanitarian grounds notes of five hundred and one thousand rupees will be accepted at government hospitals, pharmacies in government hospitals (with prescription of a doctor), booking counters for railway tickets, government buses, airline ticket counters, petrol, diesel and gas stations of PSU oil companies, consumer cooperative stores authorized by the state or central government, milk booths authorized by state government and crematoria, burial grounds.

Shri Modi emphasized that there is no restriction on any kind of non-cash payments by cheques, demand drafts, debit or credit cards and electronic fund transfer.

In his address the Prime Minister shared the insight into how the magnitude of cash in circulation is linked to inflation and how the inflation situation is worsened due to the cash deployed through corrupt means. The Prime Minister added that it adversely affects the poor and the neo-middle class people. He cited the example of the problems being faced by the honest citizens while buying houses.

A time-tested commitment to eradicate black money

The Prime Minister has time and again said that the Government is committed to ensure that the menace of black money is overcome. Over the past two and a half years of the NDA Government, he has walked the talk and led by example.

The very first decision of the Prime Minister led NDA government was the formation of a SIT on black money.

A law was passed in 2015 on disclosure of foreign bank accounts. In August 2016 strict rules were put in place to curtail benami transactions. During the same period a scheme to declare black money was introduced.

The efforts have borne fruit. Over the past two and a half years, more than Rs. 1.25 lakh crore of black money has been brought into the open.

Raising the issue of black money at the world stage

Prime Minister Narendra Modi has time and again raised the issue of black money at the global forum, including at important multilateral summits and in bilateral meetings with leaders.

Record growth in last two and a half years

The Prime Minister said that the efforts of the Government have led to India emerging as a bright spot in the global economy. India is a preferred destination for investment and India is also an easier place to do business in. Leading financial agencies have shared their optimism about India’s growth as well.

Combined with this, Indian enterprise and innovation has received a fillip due to the ‘Make in India’, ‘Start up India’ and ‘Stand up India’ initiatives that seek to celebrate enterprise, innovation and research in India.

The historic announcements made by the Prime Minister will add value to the already thriving efforts of the Central Government.

PIB

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New Delhi: A bill to deal with black money stashed abroad was passed by Parliament today with government warning those having such assets to utilise the ‘compliance window’ or have sleepless nights once the global automatic information exchange system comes into effect in 2017.

Finance Minister Arun Jaitley said in Rajya Sabha that the new law, with stringent provisions, will help “squeeze” black money even as he underlined that the option of ‘compliance window’, which may run for a few months, was not an amnesty scheme.

“The world is no longer willing to tolerate tax havens which thrive in secrecy,” he said, just before the ‘Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Bill, 2015′ was approved by the House, two days after the Lok Sabha passed it.

Jaitley, however, made it clear that the new law will not cover those having amounts equivalent to Rs 5 lakh in bank accounts abroad, which may belong to students or those working there.

The compliance window will provide an opportunity to people to come clean by declaring overseas assets and paying tax and penalty totalling 60 per cent, Jaitley said while replying to a debate on the bill on the last day of the session.

The timeframe for the compliance window will be notified as part of the rules.

“It is a taxation which is being imposed on an asset or an income outside. Since the tax has been imposed for the first time, we are giving you a compliance period where you pay 30+30 per cent and then you can sleep well.

“And then also remember, if you don’t use this compliance window now, time will run out because by 2017 there will be a realtime automatic disclosure of information taking place,” he said.

The Bill, which seeks to unearth unaccounted funds and assets stashed by Indians abroad and provide for 120 per cent tax and penalty in addition to 10-year jail term, will become law after getting assent of the President.

The government has also armed itself to attach domestic property of equivalent value of such offenders.

PTI

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New Delhi: The bill, which provides for penalty and tax up to 120 percent along with criminal prosecution for those who have parked black money abroad, was passed in the Lok Sabha on Monday.

Finance Minister Arun Jaitley, who moved the bill in the Lok Sabha, asked the opposition not to develop ‘cold feet’ in supporting the legislation.

Jaitley rejected the demands of the opposition parties to refer it to the Standing Committee. The Finance Minister said that delay in enacting the legislation would provide opportunity to offenders to transfer unaccounted overseas wealth to unknown destinations.

The bill provides for rigorous imprisonment of up to 10 years for offenders.
ANI

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New Delhi: A new Benami bill, aimed at curbing generation of domestic black money, will soon be brought before the Cabinet, government told the Lok Sabha today.

“As regards the Benami Bill, the redrafted Act is at a very advanced stage… A more modern Benami bill has been drafted. It will reach the Cabinet any day,” Finance Minister Arun Jaitley said.

Apart from confiscation, the Bill would provide for prosecution and would aim to act as a major avenue for blocking generation and holding of black money in the form of benami property, especially in real estate.

Jaitley said the inclusion of the parallel economy of black money into the main economy, would help government to lower tax rates.

“The need to curb domestic black money is extremely important. We need to bring slowly more and more of our economy into declared economy. This has ability to bring up tax collection, GDP, enables to help the government to bring down the taxation.

“If parallel black money comes into the economy, then the taxes go down,” Jaitley said.

The government had in Budget 2015-16, presented at the end of February, announced that it would come out with a new and more comprehensive Benami Transactions (Prohibition) Bill.

The Benami Transactions (Prohibition) Act was earlier enacted in 1988, but the rules under that Act could not be formulated due to inherent infirmities in the Act.

Following this, in 2011 the government introduced in Parliament a Benami Transactions (Prohibition) Bill, which proposed replacing the 1988 Act.

The Bill was referred to the Standing Committee on Finance for examination, which submitted its report in June 2012. However, the Bill lapsed with the dissolution of 15th Lok Sabha.

PTI

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