8 steps of PM Modi’s surgical strike against black money|Attack of Modi

8 steps of PM Modi’s surgical strike against black money

8 steps of PM Modi's surgical strike against black money|Attack of Modi

While the currency revamp may have come across as a surprise move, Prime Minister Narendra Modi has been preparing for the move ever since he came in power.

though Prime Minister Narendra Modi pulled off a major coup today to check black money, he had laid its foundation over two years ago, soon after coming to power in May 2014.

Though today’s unprecedented financial measure may have come as a rude shock to many, Narendra Modi also gave enough opportunities and threw enough hints in this regard. However, he waited for the festival season of Dussehra and Diwali to get over.

  1. SC-monitored SIT on Black Money

    The first such initiative came when the Narendra Modi Government, in its very first Cabinet meeting, constituted a Supreme Court-Monitored Special Investigation Team (SIT) on Black Money.
  2. Jan Dhan Yojana

This was followed by the launch of the Pradhan Mantri Jan Dhan Yojaya (PMJDY) on August 28, 2014. Prime Minister Narendra Modi took personal personal interest in the scheme. He made it a mission to ensure that the scheme was successful. The scheme will be of immense help in the present circumstances. Now that Rs 500 and Rs 1000 currency denomination notes have been banned, transactions from banks will acquire importance. Opening of accounts even in the remote areas will help the rural villagers. They will not feel the pinch of the banning of the currency notes.

Had the bank accounts not been opened, the people would have faced immense problems. But not now, at least for those who have bank accounts. Till date, 25.45 crore accounts have been opened so far and Rs 45,302.48 crore has been deposited in these accounts. A total of 20.28 crore accounts have been opened in the public sector banks – 11.39 crore accounts in the rural areas while 8.90 accounts in the urban areas.

A total of 4.30 crore accounts have been opened in the Regional Rural Banks – 3.70 crore in the rural areas and 0.60 crore in the urban areas. As far as the private banks are concerned, a total of 0.86 crore banks have been opened – 0.53 crore in the rural areas and 0.34 crore accounts in the urban areas.

Hence, a whopping 15.62 crore accounts have been opened in the rural areas and 9.83 crore accounts have been opened in the urban areas.

8 steps of PM Modi's surgical strike against black money|Attack of Modi

  1. Renegotiation of Tax Treaties and Automatic Information Exchange Agreements with Tax Havens

    The government renegotiated the Double Tax Avoidance Agreement (DTAA) with Mauritius to impose Capital Gains Tax if such Capital Asset is situated in India. The Narendra Modi Government also negotiated an Automatic Information Exchange Agreement with Switzerland. Agreements are also being negotiated with other tax havens. From 2017, Organisation of Economic Cooperation and Development (OECD) countries have agreed to share information on foreign account holders with their home countries.
  2. The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 for Foreign Black Money

    The scheme was launched to bring back black money stashed in foreign countries and tax havens. The scheme ended on 30 September, 2015. The Act also had various stringent provisions for penalty and prosecution of foreign black money holders unearthed during future investigation by the tax department.
  3. Income Disclosure Scheme, 2016

    The Income Declaration Scheme (IDS) which opened on June 1 gave a chance to black money holders to come clean by declaring the assets by September 30 and paying tax and penalty of 45 per cent on it. The Narendra Modi Government wanted to capture the entire parallel economy flowing in the system of Rs 7 lakh crore in India. The government was upset with the output of IDS scheme. Though the Income Tax department had identified 90 lakh high value transactions without PAN, the final disclosure of black money was to the tune of Rs 65,250 crore.
  4. Penalty on Real Estate Transactions undertaken in Cash exceeding Rs 20,000

The Narendra Modi Government imposed a penalty of 20 per cent on all cash transactions exceeding Rs 20,000 to purchase or sell a property (real estate). This was aimed at curbing the role of black money in real estate transactions.

  1. Tax Collection at Source on Cash Sales exceeding Rs 2 lakh

    Another important step to check high value cash transactions and create an audit trail was to impose Tax Collection at Source at a nominal rate of 1 per cent on cash purchases exceeding Rs 2 lakh.
  2. Benami Transaction (Prohibition) Amendment Bill

    The Parliament passed the Benami Transactions (Prohibition) Amendment Act, 2016 (BTP Amendment Act) in August. It came into force from November 1, 2016. The new law seeks to give more teeth to the authorities to curb benami transactions. The notification issued by the Income Tax department, stated that after coming into effect,  the BTP Amendment Act, the existing Benami Transactions (Prohibition) Act, 1988, shall be renamed as Prohibition of Benami Property Transactions Act, 1988 (PBPT Act).

 

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