Cash exchange is taxable, not an immunity scheme, warns FM

SansadTV Bureau

Saying that governments heavy clamp down on Blackmoney will impact spread of uncounted cash distributions during elections, Finance Minister Arun Jaitley said the scheme will attract taxes and does not act as immunity scheme for depositors.

Finance Minister Arun Jaitley Photo-PTI

Finance Minister Arun Jaitley
Photo-PTI

Addressing media on governments move to demonetise higher denomination notes, 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.

Saying that political funding will impact by the withdrawal of higher denomination currency notes, FM said that people holding legitimate money which had been disclosed should not worry.

Addressing media day after government demonetised 500 and 1000 rupee notes, Union Finance Minister said that the latest step by the government to demonetise Rs 500 and Rs 1,000 notes has made people with black money worried.

 “It pays to be honest: Finance Minister Arun Jaitley on withdrawal of Rs 500 and Rs 1,000 notes. It may prove to be inconvenient for sometime but long term prospects are bright,” Jaitley Said.

Calling arguments against government’s latest move as a step to eradicate corruption, Jaitley asked people who have cash saved at home not to panic and get it exchanged in nearby banks.

TV Grab- Prime Minister Narendra Modi gestures as he addresses to the nation in New Delhi on Tuesday.

TV Grab- Prime Minister Narendra Modi gestures as he addresses to the nation in New Delhi on Tuesday.

Saying that Indian economy needs to become cashless soon the Finance Minister said that real estate will become more affordable now.

“This is no immunity scheme; all deposits of old Rs 500, Rs 1,000 notes in bank accounts will be subject to tax laws,” said Finance Minister confirming that present immunity mechanism on black money will not apply to demonetised notes.

Finance Minister addressed media explaining intention of the government behind removing existing 500 and 1000 rupee notes from use after it received mixed reaction from the public.

People across the country have complained of cash crunch for emergency consumptions as ATM machines stopped working following Prime Minister’s announcement.

 “Everybody is giving Rs 500 or Rs 1000 notes, we don’t have enough change available, even banks are closed. We are not even able to get medicines & daily items as everybody is denying taking Rs 500 and Rs 1000 notes,” said a Local customer in Lucknow.

A policeman keeps a watch on people lined up outside an ATM to withdraw 100 rupees notes and deposite 500 & 1000  rupees notes in Chennai on Tuesday after Prime Minister Narendra Modi on Tuesday announced demonetization of Rs 500 and 1000 currency notes Photo-PTI

A policeman keeps a watch on people lined up outside an ATM to withdraw 100 rupees notes and deposite 500 & 1000 rupees notes in Chennai on Tuesday after Prime Minister Narendra Modi on Tuesday announced demonetization of Rs 500 and 1000 currency notes
Photo-PTI

On the other hand, Gold prices have surged Rs 750 to hit 6-week high of Rs 31,600 per 10 gram as government cracked a whip on black money.

Long queues were seen outside jewellery stores on Tuesday night as customers tried to convert their Rs 500, Rs 1,000 currency notes into gold or silver jewellery.