From long ATM queues to frowning faces, outburst of emotions have witnessed as cash crunch takes a toll on lives of average Indian citizen. But what remained hidden, was the impact on corruption, which caused change in DNA of Indian Economy is supposed to give long-term gains- anticipates financial analysts.
Over-the-counter exchange limit of old banknotes is 2,000 rupees, while the withdrawal amount of Rs. 24, 000 in a week is expected to soon revise in near future. Though, ATMs has started dispensing new notes, lack of cash transporting vehicles has caused shortages of cash in active ATMs. Overnight withdraw of Rs.500 and Rs. 1000 banknotes from circulation, caught many off guard and disrupted a major section of cash-intensive economy. Sanjay Mookim, Research Analyst of BAML (Bank of America Merrill Lynch) estimates that Demonetization has led to much slower consumption until next year.
This move will aid government in many ways. Not only they will be able to track unaccounted money, but enroll more taxable money into banks. Even to make an investment, individuals are required submit pan or show income proof, which has further prevented many from choosing investment plans as an ideal option to save and grow money. Such money has been hidden for long, used and misused in ways whenever necessary. Demonetization has impacted many people, who are left with no option than to declare their valid income and pay tax. It’s an attempt to halt fake currency circulation in a single shot.
Businessmen are ready to pay tax and show their hidden income. Unaccounted wealth accumulated by Tax payers has also started hitting the bank accounts, making them pay more tax on the deposited amount. Individuals depositing cash above Rs 50,000 are supposed to submit a copy pan card. This will act will assist tax department in tracking net-worth of tax paying individual.
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