NEWS

PM Modi calls Cabinet meet to discuss demonetisation

Source:PTI
November 24, 2016 18:42 IST

Prime Minister Narendra Modi has called Cabinet meeting tonight, possibly to discuss the penal 200 per cent tax that is keeping away the scrapped 500 and 1000 rupees notes from entering the formal system.

The meeting, summoned at a very short notice, comes amid reports of high tax penalty terrifying people from putting their cash savings into the formal banking system.

Sources said the government wants all of the 500 and 1000 banknotes to be deposited and not burnt or destroyed for the fear of penal action.

The Income Tax Department had previously warned that cash deposits above Rs 2.5 lakh threshold post demonetisation decision could attract tax plus a 200 per cent penalty in case of income mismatch.

It was stated that the department was tracking all cash deposited during the period of November 10 to December 30, 2016, above a threshold of Rs 2.5 lakh in every account.

his had put a fear in people with reports of the banned currency even being destroyed.

Sources said the government may come out with a deposit scheme or an instrument like bond where the cash savings in the banned notes could be deposited.

Modi's November 8 shock ban on high-denomination currency notes had swept away 86 per cent of the currency in circulation in the biggest ever crackdown on black money, corruption and counterfeit currency. The move had led to Rs 14 lakh crore worth currency being withdrawn from circulation.

A 50-day window was given to holders of the old currency to deposit in their bank accounts. But the penal tax provisions were deterring many.

Source: PTI
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