Clearing the air on the motives of the Union government in demonetizing the Higher-value currency notes, Finance Minister Arun Jaitley said depositing now defunct currencies of Rs 500 and Rs 1000 in bank accounts does not provide immunity against the income tax. The finance minister explained that the law of the land will be applicable to every bank transaction that takes place from November 9.
“Depositing old currency in the bank accounts does not mean that you are free to go with the new denomination notes. In all the cases where the deposit amounts are higher, the depositor has to disclose the source of income to avoid income tax. Our chief motive behind this move is to pull out people who evade tax”, Mr. Jaitley said during an interview to DD news channel.
The minister said that the households and farmers need not worry about taxes while depositing their savings in the bank and assured of an equal value in return. “We understand the concerns of households and small farmers who save 30,000 to 50,000 for household expenditure or hospital expenses. I assure them that they need not worry and that the government will not impose any tax on them. Your hard earned money is yours if it has been earned legitimately”, he said.
Mr.Arun Jaitely opined that the current scenario will suffocate all the tax evaders and force them to disclose their income and thereby, become a tax payee. He also predicted that India may soon become the World’s most tax compliant nation following the demonetization scheme. He added that all those who have accumulated money through crime activities or by taking bribes and hiding black money are the ones who will suffer due to demonetization.
When asked about the inconvenience caused to general public, Mr. Jaitley said, “It is inevitable. This confused situation will continue for the next two weeks and then we are hopeful that everything will become normal as we will be pumping adequate currency notes into the market by then. We have to feel the pain for sometime if we wish to see India as a developed nation. We cannot just fear inconvenience and live in a society with counterfeit notes and black money”, he concluded.