Government of India has scrapped 500 and 1,000 Rupee notes, to curb black money in the country. Black money fuels corruption and terrorism in India. So what is the immediate impact of demonetization?
Indian economy faces a huge loss every year, because of circulation of fake notes. Now circulation of fake currency has almost stopped, because of demonetization.
Mobile ATM’s are also known as cash on wheels. Mobile ATMs have been rolled out in increasing numbers by several banks, at government and private hospitals, to provide relief to patients.
Banks have come up with 2 lakh Aadhar based ATMs, to provide relief to the people who live in remote areas. If your bank account is linked to your Aadhar card, you can withdraw your money at Aadhar ATMs, just by scanning your finger and debit card.
Bank accounts issued under Jan Dhan Yojana (PMJDY), are now filled with cash, as hoarders of black money, are using these accounts to deposit their cash.
After the demonetization, around INR 3 lakh crores, have been deposited in government and private banks. Banks are getting a lot of deposits from citizens. Most of these deposits are in savings bank accounts. Now banks have a lot of money to lend to you and other citizens. Due to this high liquidity, banks might reduce their lending rates.
Due to the scrapping of high value notes, many businessmen are coming forward, to declare their black money as income and depositing the same with the income tax department, as advance tax.
After the demonetization of high currency notes, small vendors have adopted, smart ways of accepting payment. They are accepting payments made through mobile wallets and online payment services, to keep their business going.
Salaried people are depositing their black money in banks, by showing it as income from other sources, in the current assessment year and then paying 33% income tax on it. If you deposit large sums of cash, which do not match your income, you have to pay up to 200% tax. You can easily deposit cash in the bank, show it as income from other sources (current assessment year) and then pay, only 33% income tax on it.
Yes…Demonetization has several impacts, few of which are listed here. Be Wise, Get Rich.
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