The announcement of demonetisation of 2000 rupees bank notes in India has started a frenzy among some people. Not everyone has 2000 rupee notes, but many of those who have them, think that standing in line at the bank and changing the notes will not work. In particular, those who do not declare the entire amount in hand, i.e. hoarders. According to the Economic Times, people in India are rushing to buy gold instead of exchanging notes. But for that they have to pay premium or extra price. In the informal gold market in Mumbai on Saturday afternoon, the cost of buying 10 grams of gold using Rs 2,000 notes is Rs 67,000, although the official price of gold including GST is Rs 63,800. Additional money is charged as premium from buyers. Various market sources told Economic Times that some people have spontaneously started flocking to gold shops after the announcement of demonetisation. Gold premiums rose after the announcement. However, sources believe that it will decrease in the next few days. There is a period of four months to change notes, so people will try different things. However, after demonetisation in 2016, the rules became more stringent. Along with this, the demonetisation move will also have an impact on the housing sector, with the possibility that note hoarders will have little choice. According to the report of Economic Times, people do not see these 2000 rupees notes as a solution to come under tax by depositing them in the bank. This happened in 2016 as well, those who submitted the notes received notice from the revenue office in 2021 as well. Another opportunity is to donate to religious institutions, including temples, as these institutions can receive donations from anonymous sources. As a result many people can exchange small amount notes by donating to those institutions. In 2016, many gold traders sold gold in exchange for scrapped Rs 500 and Rs 1,000 notes. As a result, many may be tempted to do so this time as well. Buyers still had to pay a large premium, but later the gold price rose significantly and buyers were able to recoup the loss. But this time it will not be the same as the previous time, according to the news of Economic Times. Siddharth Banwat, a chartered accountant in Mumbai, said that those who want to use Rs 2,000 notes for various purposes need to think about the consequences. Some may see a glimmer of hope in short-term trading, but the law imposes various restrictions. For example, Siddharth Banwat said, PAN (permanent account number) is mandatory for transactions in several cases, such as paying bills of more than 50,000 rupees at a time in hotels and restaurants; PAN is mandatory in case of foreign travel or purchase of foreign currency in transaction of 50 thousand rupees at one time and purchase of goods and services worth more than 2 lakh rupees. Read more 6 arguments in favor of the sudden cancellation of 2000 rupee notes in India India’s two thousand rupee note Further, as per 269 ST of the Income Tax Act of India, no person shall accept more than two lakh rupees from any person in a single day or in respect of one transaction or one incident. Apart from this, the mandatory minimum transaction limit for e-invoicing has been brought down to Rs 5 crore at the beginning of this month. But there are still four months left, in which people will figure out many more ways, the report said. After the demonetisation of 2016, many of those who submitted the notes have received notices from the Income Tax Department. The government then confirmed that the government will not question savings up to Rs 2.5 lakh. But this time there is no such instruction. Those who have Rs 2000 notes can now avoid going to the bank to avoid being raided by the Income Tax Department. Priyank Ghia, partner, Chokshi & Chokshi LLP, therefore feels that there is a need for clear guidance, even for those who have valid notes. In 2016, many people bought legitimate assets, bought club memberships, went to spas and gyms with undisclosed money. Traders have paid off suppliers or settled old debts. This time too many people will do that, but this time it may be less in terms of quantity. But will the income tax department be able to catch the black money after the handover, the Economic Times has raised the question. That’s still a big part of the game.
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