Soon after its demonetization drive, the Modi government has taken several initiatives to weed out black money from the system and increase transparency in the economy.
Here we take a look at five such big moves which will help curb black money going ahead and make our economy stronger:
1. To give you another chance to come clean
The government is likely to notify this week the scheme giving tax dodgers another chance to come clean by paying 50 per cent of tax on junked currency deposited in banks post demonetisation. The Pradhan Mantri Garib Kalyan Yojana (PMGKY) provides for 50 per cent taxes and surcharge on declarations of unaccounted cash deposited in banks. Declarants also have to park a quarter of the total sum in a non-interest bearing deposit for four years.
The Department of Revenue will by the end of the week notify PMGKY 2016, which was a part of ‘The Taxation Laws (Second Amendment) Bill, 2016’ and was approved by the Lok Sabha on November 29. “The notification will provide details as to how declarations are to be made (format) and the manner of paying taxes, whether in installments or in full. It will also provide an end date to the PMGKY scheme,” an official told PTI.
2. To take action against benami property
The Modi government is all set to take action against ‘benami’ property. Soon after demonetization of Rs 1000 and Rs 500 currency notes, PM Modi announced that more anti-graft measures were on the anvil, including action against ‘benaami property.’ “This government does not want to bother honest people but doesn’t want to spare the dishonest. Bear with me for 50 days. Has India been looted or not? ….. I am not going to stop at this. I will expose the history of corruption of 70 years since Independence,” Modi said. “This (demonetisation) is not an end. I have more projects in mind to make India corruption-free. …. We will take action against ‘benami’ property. This is a major step to eradicate corruption and black money … If any money that was looted in India and has left Indian shores, it is our duty to find out about it,” he said in his speeches.
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3. To intensify search operations
After demonetization, Modi has many-a-times hinted that nobody will be allowed to hide black money and search operations will be conducted against those having unaccounted wealth. Keeping this in view, the tax department is already finding out details of money deposited in bank accounts after November 8 and may intensify their search operations soon.
4. Salary payment only through bank account
The Modi government is using demonetisation as an opportunity to push its financial inclusion initiative. Top Central government officials have already asked states, banks and employers to open bank accounts for even temporary workers belonging to the unorganised sector. Employers were “advised” to pay wages or salary to even contract and casual workers “only through bank accounts”. The government will also launch a campaign to open bank accounts in respect of those workers of organised and unorganised sectors who do not have their own bank accounts even now.
5. Focus on digital transactions
This is the biggest initiative of the Modi government to weed out black money from the system and increase transparency in the economy. This will also help avoid tax evasion both by individuals and companies. In a bid to give a boost to digital transactions, the government has also unveiled a raft of measures, including discounts on online payments for insurance policies, rail tickets and highway toll charges, and more such measures are on cards.