After cash demonetization that happened in India in November 2016,
everyone is shocked. If such a thing like demonetizing 85% of currency
notes that were circulating in India, anything could happen. Indian
Prime Minister Narendra Modi is determined to fight against black money.
After demonetization Narendra Modi said that this plan was in his mind
for past few months. Prime Minister Modi also mentioned that he has more
tough plans in his mind and will implant it in future if needed. It
means that any kind of strict actions will be taken against black money.
Will it be a Gold or Real estate surgical strike ?
24-11-2016 – News reports are coming out that strict regulations will
be made regarding property, land registrations done by all people who
have income above Rs.2,50,000 per year. Income tax department has asked
to quote PAN number for all land registrations done by people who have
income more than 2 lakhs fifty thousand. Earlier quoting of PAN number
ws only for people who had income of more than Rs.2,50,000. This means
majority of people who do buying or selling property have to give their
PAN number. So even though E-Property pass book is not implemented in
India as speculated, there will be strict regulations on land, property
registrations. More strict restrictions are believed to come which will
affect real estate making value of properties go down. This will be a
big blow to people who purchased properties for huge rates with black
money, planning to sell it later. So let us wait and see what are
upcoming notifications regarding real estate black money unearthing.
What are different forms in which black money is stored in India. It
was assumed that black money is transferred or deposited into Swiss bank
accounts abroad. On investigations it was found that it was true to
some extent. A contract agreement was signed between India and
Switzerland known as Multilateral Competent Authority Agreement (MCAA).
From 2019 Switzerland will start giving details of Indians who have
invested money in Swiss bank accounts. Another shocking fact that lakhs
of crores of money that is made illegally is invested in real estate
properties, gold investments, fixed deposits in co-operative banks, real
physical cash hidden in buildings .etc. With demonetization all hidden
real cash is unearthed or made useless with only value of paper after
removing it’s legal tender from 8-11-2016.
Co-operative banks had crores of deposit in it and did not follow KYC
norms as per guidelines of Reserve Bank of Inida (RBI). This was why
RBI did not allow exchange of old notes by Co-operative banks and so
customers are not able to liquidate cash in these banks. Income tax
department will conduct investigation to reveal sources of all deposits
in Co-operative banks.
Savings accounts, Current accounts that make deposits above allowed
limit will be given noticed by IT department to reveal source. So what
remains now is gold and real estate where black money is hidden. Black
money holders who deposited in both these things are having sleepless
nights. They are having nightmares that Narendra Modi will impose some
kind of ban on both these investments in future.
This was when a message became circulated among gold traders
association that gold import ban may happen in India. It caused lot of
tensions to jewelry owners and customers regarding what will be actions
taken against gold. Later gold merchants said that it is just a
possibility and not a confirmed decision.
Black money is said to affect economic development of India, where
lakhs of people do not even have food for one time. Is eradication of
poverty be possible by hunting down black money in India. After
demonetization of currency and bringing limits to withdrawal limits
everyone in India became poor and experienced what is poverty for 1 or 2
days in his life.
Many experts said that gold import ban may not be possible, but there
are many people saying that it could be possible as a way to stop black
money conversion into gold. In a situation like currency demonetization
of Rs.500, Rs.1000 notes in India everyone is prepared to accept that
Modi is a strong leader who can take tough decisions.
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