oppn parties Illegal Cash: Disclose or Suffer

News Snippets

  • In reply to a question in Parliament, the government says it is empowered to lawfully intercept, monitor or decrpyt information stored in a computer resource in the interest of sovereignty or integrity of India
  • Police stop a 12-year old girl on her way to the Sabarimala shrine
  • In Karnataka, the JD(S) indicates that it might support the BJP government if it falls short of numbers after the bypolls
  • Congress pips the BJP in local body elections in Rajasthan, winning 961 wards to the BJPs 737
  • After Airtel and Vodafone-Idea, Jio also indicates that tariffs will be raised from December
  • Sources in Shiv Sena say that they might revive the alliance with the BJP if it offers the 50:50 deal
  • A miffed Sanjay Rout of the Shiv Sena says that it will take "100 births" to understand Sharad Pawar
  • Mobile operators Vodafone-Idea and Airtel decide to raise tariffs from next month
  • Sharad Pawar meets Sonia Gandhi and says more time needed for government formation in Maharashtra
  • Justice S A Bobde sworn in as the 47th Chief Justice of India
  • Supreme Court holds hotels liable for theft of vehicle from their parking area if parked by valet, says "owner's risk" clause is not a shield from such liability
  • Finance Minister says she is receiving feedback from many sectors that recovery is happening as there is lower stress
  • Sabarimala temple opens, but police bar the entry of women below 50 years
  • Finance Minister Nirmala Sitharaman says Air India and BPCL to be sold off by March
  • Media person Rajat Sharma resigns as DDCA president
Two Muslim litigants in Ayodhya refuse to accept the Supreme Court order, say review petition might be filed
oppn parties
Illegal Cash: Disclose or Suffer

By Sunil Garodia

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.
For those in a fix about what to do with their pile of outlawed currency notes (apart from seeking a change agent @ 40%), the government has opened a window. Under a special disclosure scheme, named Prime Minister Garib Kalyan Yojna (PMGKY), disclose illegal cash and pay a total of 50% as tax, interest and penalty. Do not disclose, get caught later and pay a total of 85%. There will be no enquiries under any other act, including Benami, after the disclosure.

In a new set of rules announced today, the government has said that those who can explain the cash they have deposited in their accounts have nothing to worry. It could be in the form of cash in hand being brought forward from previous years. It could be income of the current year, supported by proper bills, vouchers and documents. But if the deposit remains unexplained, the person has two options. He can either declare it as undisclosed, illegal cash or keep mum, hoping that the tax authorities miss him in the avalanche of transactions that are being generated post demonetization.

If someone goes for the second option, he is either being too brave or extremely stupid. All banks are going to report all transactions of cash over Rs 2.5 lakh in old currency notes being deposited in any savings bank account in the country. They will also report amounts less than the threshold in case of Jan Dhan accounts or accounts that were dormant or did not have a history of cash transactions in moderate to heavy volumes in the past. The tax department has state of art software, with many filters and the same has been integrated with the information banks provide to it. The systems will red flag every suspicious transaction on its own, without the need of manual intervention. Notices will be generated and sent without fail. Hence, there will be no escape.

For those choosing the first option – that of declaring the undisclosed income – many benefits will accrue. They will pay a total of 50% as tax and penalty. Out of the balance, 25% will be locked for 4 years in an instrument to be specified later. They will be able to use the rest. They will not be prosecuted under any other act. That will be much better than scouting for dalals or change agents who are willing to convert the old to new at commissions ranging from 30 to 50%. While the changed money will still remain black when changed through an agent, it will become white in your books if disclosed to the authorities.

This is a good opportunity for those who have been stashing illegal cash for years. One has heard experts saying that very little cash is stored in bags and other assorted places. Ask this to bank staff who are complaining about the unholy stench emanating from the same. There is huge market for short term and long term cash and moneybags with muscle power, including the political kind, are known to store cash under their beds, in gunny sacks and huge leather bags. One corrupt official near Kolkata had cash buried in his walls. Hawala operators are known to keep mountains of cash at multiple locations to feed their chain. Now is the time for all such people to become clean, make a contribution for the nation’s progress and clear their conscience, if they have any. Otherwise, they will lose 85% of their booty and live with the stigma of being enemies of the nation.