An Open letter to Arvind Kejriwal by CA Mehul Shah to explain the probable Logic behind issuing New 2000 Rupee Note instead of 1000 Rupee Note

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An Open letter to Arvind Kejriwal by CA Mehul Rasesh Shah | Read it in Hindi

to explain the probable Logic behind issuing New 2000 Rupee Note instead of 1000 Rupee Note, reason for lower withdrawal limits and ease of carrying notes etc..

Sir, I am a practising Chartered Accountant aged 28 in Surat and I was very hopeful that you would support the Notification for Demonetization of Currency and was very eager for your Reaction because your very entry into Politics was for supporting any small move to reduce Black money and Corruption and after all, this was indeed a very big and bold move….!

But after going through the Video released yesterday, my expectations from AAP as a Commonmen were shattered once again because I believed that a person of such stature and designation as you would spread positivity all around without any ifs and buts to make this Mega Clean-up Drive possible and rather help the common men in mitigating the problems rather than nagging about the same and hence I would like to bring to your knowledge the following Points.

Point 1

As you have stated in your Video that it took full 2 days for you to understand the various aspects of the Scheme and even after consultation with various Experts , you could not basically understand the Logic of why 2000 Rupee Notes were released instead of 1000 Rupee Note, I would like to make an attempt to tender my best possible logic ( Please enlighten me if I am wrong somewhere) as follows:

Sir, let us Simply take 2 Scenarios to understand the funda !

Scenario A : If as per your suggestion ,  Rs. 2000 Note are not issued but only New Rs. 1000 Notes are issued.

Lets say , for example Mr. X has Rs. 1,00,000/- black money in 100 Old Notes of Rs. 1000 each.

Mr. X divides those Rs. 1,00,000/- into 10 Equal Bundles, each comprising of 10 Old Notes of Rs. 1000 each and puts each Stack on a Table.
On Day 1 , in the morning Mr. X would deposit the first Bundle i.e. 10 Old Notes of Rs. 1000 valued at Rs. 10,000 into the bank and on same Day 1 in the Evening he would withdraw 10 New Notes of Rs. 1000 again valued at Rs. 10,000 and put it in the Locker in his house.

Now the real Game starts.
On Day 2 : Morning , Mr. X would deposit the second bundle of 10 Old Notes of Rs. 1000 valued at Rs. 10,000 kept on the Table. However in his books of accounts submitted to Income Tax Department, he will show that he has deposited the same 10 New Notes which was withdrawn on Day 1 : Evening ( which is actually still lying in the Locker of House )

On Day 2 : Evening , Mr. X would again withdraw 10 New Notes of Rs. 1000 valued at Rs. 10,000/- and keep the same in Locker . So at the end of Day 2, Mr. X has Rs. 80,000 on Table in Old Notes and Rs. 20,000/- in New Notes in Locker.

Now Day 3 will come in next week as limit of Rs. 20000 per week.

The same exercise shall continue till Day 10 and by the end of Day 10, Mr. X shall have no Old Notes and Rs. 1,00,000 in 100 New 1000 Rupee Note in the Locker.

However, to the Income Tax Department while presenting his cash book, Mr. X has shown that he was having only Rs. 10,000/- as black money initially ( i.e. one bundle of 10 Notes of Rs. 1000 ) and he has rotated the same Rs. 10,000/- by depositing it into Bank account in the morning and withdrawing it in the evening and again redepositing the same on next day and so on.

Thus, Mr. X has paid tax only on initial Rs. 10,000 whereas he has managed to convert all his Black money of Rs. 1,00,000 into new Notes. The New Notes lying in locker are still not known to any I.T Officer and remain unaccounted.
This Modus operandi is called Peak theory i.e. theory of rotation of same money which is accepted by most of the High Courts and Tribunals.  Revenue is also sometimes helpless to catch Mr. X because the above scenario can also occur in genuine cases where you withdraw money from bank to purchase something and then when you think that no good deal is available, you may again deposit the same money into your bank account and hence logically are not required to pay tax again.

Scenario B :  Watch what happens when PM issues New 2000 Rupee Note instead of 1000….! 
Mr. X deposits first bundle of 10 Old Notes lying on Table in the Bank on Day 1 : Morning and then he withdraws 5 New Notes of Rs. 2000 on Day 1: Evening and keeps it in locker.
Now on Day 2 : Morning when he goes to deposit second bundle of 10 Old Notes of Rs. 1000 each and wrongly shows the Income Tax Department based on cash book that he has redeposited the same money which was withdrawn on Day 1:Evening – Bingo !!!

He is stuck now !! Because if AO enquires and calls for copy of the Bank slip on Day 2 submitted to bank, it will show deposition of 10 Notes of Rs. 1000 each whereas the Govt knows that Mr. X could never have withdrawn on Day 1 any note of Rs. 1000 because they were never Printed !!!!

The above examples are described to understand the concept of rotation of money and the fact that no tax is levied  on redeposit of cash into bank.

Even if the above explanation is hypothetical as a concept, it gives a glimpse that such on-paper rotations may be attempted or many other “jugaad” may also be possible using some improvised theory and hence  the best way is to go for a strategic decision to discourage the rotation of money by keeping lower withdrawal limits and at the same time deferring the printing of Rs. 1000 note as taken by our PM and hence we should respect the strategic decision of PM who is elected by democratic majority rather than questioning him at each level.

Even, if we disregard the above theory of discouragement of rotation of money , another strategy may be to call back all Rs. 2000 Rupee Notes after 2-3 year once the New Rs. 1000 Notes are in circulation and this will further keep a check on corruption which many have already been questioned. This is because the businessman who have managed bogus accommodation entries to make money white in this period are likely to reverse the entries and get them converted into Rs. 2000 notes in January 17.

Just as a food for thought,  what if new Notes be printed with an expiry period of 10 years, 20 years and 30 years and so on and hence the same has to be deposited into Bank before expiry date. People are asking how do you reduce corruption after Jan 2017 ? This step shall reduce corruption and reduce chaos at every deadlines as while I have few notes expiring now I shall also have few Notes which are due expiry in next 10 years and hence do not have to stand in long queue for withdrawals !! 

Also with inflation the value of Rs.  1000 notes had gone down so induction of a new higher denomination had become necessary. The US has $100 note whereas UK has €50 both valued around Rs. 6000/-

Another simple logic is to save the printing and transportation cost compared to its face value assuming that much cost has gone into securing that fake notes of Rs. 2000 are not easily printed.

ATMs can be stuffed with more cash if Rs 2000 notes are used which is the need of the hour.

Further, the fact remains that when someone is holding the new Rs. 2000 Rupee Note , he is psychologically getting a sense of freshness that the country is in the growth phase. In a lighter note, Messages are being circulated not to write anything on New Notes which shows a feeling of possession. Imagine if the previous Government would have never issued new higher denominations notes with inflation and growth we would still be dealing with Annas and Pavlis!

Further it  seems that the Government wants to reduce the overall “circulation of cash” per se and at the same time enable the citizens to purchase high value goods in exceptional cases and hence this decision.

Sir, the above example also gives you an explanation to your doubt as to why the withdrawal limit is kept so low and you should rather educate people around you who are standing in long queues and nagging about low withdrawal limits and explain them as to how higher withdrawal limit may lead to more rotations and tax evasions. Though the above modus operandi can still be done with Rs. 500 note however, as mentioned the incentive would be less because Mr. X cannot withdraw more than Rs. 10000/- in a day and Rs 20000 in a week.

And believe me Sir, each and every condition in the Notification is seen to take care of the problems likely to be faced by Citizens and at the same time making sure that such Sophisticated theories are not resorted to by Black money hoarders, but questioning by you of everything in the name of Freedom of Expression may create Panic situations or bring out Loopholes in Notifications and hamper the success of reforms.

Point 2

Sir, you have again criticised and stated in the Video that printing Rs. 2000 rupee note will help to increase Corruption because Stacking those Rs. 2000 Rupee Notes would require lesser Space as compared to Stacking Rs. 1000 Notes.

In this regard, I would like to ask that Sir, have you come across any case where the “Babus” have not taken any bribe and done work honestly because they had a small Bag which could not be fitted with Rs 1000 Notes ?!

Or have you come across any Businessman who has declared unaccounted money solely because there was no space to keep those Rs. 1000 Notes !!

Point 3

As stated in the Video by you, it is true that inspite of PM efforts, there shall be dubious commission agents and unaccounted Investment in gold through jewellers, but as far as I remember when the jewellers were on strike for 45 days when our PM levied excise duty on gold in month of April 2016, it was you who supported their strike. It shows that whenever some changes are suggested to regulate a particular Market, AAP opposes them and then now you nag that the Gold market is unregulated.

Infact I believe that the PM had a full blue print for the development of our country right from Day 1 of his being elected if I recall my last 3 years as a Professional.

Firstly they asked for all the bank account number in your Return of Income

Then they linked your PAN with Aadhar

They linked all the subsidies, pension and other benefits directly to your bank account through Direct Benefit Transfer Scheme.

Then they gave opportunity to all the common men to open an account with bank through Jan Dhan Yojna

They entered into revised treaty with most of the countries in which unaccounted money goes through HAWALA e.g. Mauritius and thus the route of Black Money coming from Mauritius which everyone knew is stopped.

They passed few strict laws to overcome the evil of black money such as Benami Transaction Act and Foreign Black Money Act

They levied Excise duty on Gold.

They also made TCS compulsory for Cash transactions above 2 lakhs.

They withdrew lakhs of pending income tax and service tax litigations where Common men had won at Appeal level and Department had gone further.

They also entered into information exchange agreement with such countries.

Then they gave last opportunity to all black money hoarders through Income Declaration Scheme, 2016

Now they have a Scheme for Dispute Resolution Panel again to reduce Litigation till December 2016.

Now the masterstroke, that they have banned Rs. 500 &  Rs. 1000 denominations.

Not only the destination of this whole process is commendable but even the journey or the chronology of these events is interesting which explains the ultimate destination and who knows , may be the journey is still not over and the ultimate destination may still be the Swiss Account holders!!

Point 4

Further, you have stated in your Video that penalty would be levied at the rate of 200%. The said statement has created a panic and people have stated discounting their own hard earned cash.

Being in Income tax Department in the past , you ought to know that as per the present Income Tax Act,1961 penalty is never levied on Cash deposits but on “concealed income”. Hence when the common men is depositing Cash in hand which is duly accounted or out of his past savings and even out of unaccounted current years income whose return is yet to be filed, there shall not be any penalty if there is no mismatch between returned income and assessed income. Even the Government Officials in their statement used the words “underreporting” or “mismatch”. To understand the definition of  “underreporting”, Sir please refer Section 270A of the Income Tax Act or go through the following article:

No penalty on high denominations notes deposited into bank if such amount is declared in return of income by paying appropriate tax

Instead you could have encouraged the citizens to pay appropriate Tax.

Point 5

Nowhere in the Video have you stated anything relating to Fake currency or Counterfeit Notes because you know that the issue of Existing Fake Currency is solved foolproof.

Which situation would be better ?

Scenario A:

A Labourer standing in queue to exchange Notes from bank for a Short term.

Scenario B :

A Labourer working hard whole day to get a Fake Note at the end of the day?!

The issue of Terrorist Funding is also tackled but you chose to remain silent on the same.

You have stated that Modiji should have infused Rs 100 Note from before and it would have been you only to have said in this video that “Arre ATM se do din pehle se hi Sirf Rs. 100 ki Note bahar aa rahi thi toh sab ko pata tha , yek koi Secret nahi tha”

Conclusion

Now Sir,  if I am to believe that you really don’t understand these simple concepts even after consulting with Experts for 2 days as already described by you, I am deeply saddened because the common men believe that you are an IITian and have spent considerable time in Income Tax Department also.

Contrary to the same, If I am to believe that you already know the benefits of demonetization which I first learnt in Standard 8 when subject of economics was introduced to me and the concept of Peak Theory which is described by me above and which I learnt with my very limited experience while pursuing my profession of Chartered Accountancy , then I am more saddened and feel AAP Party as more dangerous because I believe that above any religion, politics or reservations in any caste or creed, it will always be education which shall uplift the common men and it is the common men who have elevated you to a position where you are looked by millions as their Idol and it is your duty to educate them and spread knowledge and not keep them in ignorance to preserve your vote bank.

I am grateful to all my Teachers who have selflessly shared their knowledge and some fellow members of CA fraternity who are playing an active role in creating awareness and educating Commonmen about the positive consequences of Demonetization true to the Jewel crowned to the profession as “Partner in Nation Building” and I would therefore like to  advise the citizens not to sell the notes at discounted prices or deposit the cash into bank accounts of other benami persons in fear of penalty. Further, do not claim any bogus expenses or bogus loss to gain more trouble. Do not manipulate accounts by creating bogus cash on hand. Be sporty and pay tax honestly to buy peace of building capital.

Jai Hind.

Regards,

CA Mehul Rasesh Shah

Surat

mehul@raseshca.com

PS : Sir, Please share the same explanation to Rahul Gandhiji too as lately you both share the same thoughts and statements and have same queries.

Wait for a miraculous amount of tax collection this year !!

I have mainly written this Letter for my love for writing and my love for questioning and understanding the concepts and in view of the freedom of speech and expression my country offers and hope that no one is offended.

New Update for the readers : 

At time of writing this letter, research is based on the fact that the Bank deposit slip did not have any bifurcation between old and new notes and the AIR information shared to the I.T Department also contained information only about total cash deposits in a year without any bifurcation.  As per talks at various levels, the bankers may be instructed to separately input the denomination of old notes into their MIS system at the time of deposit when the bundle of Notes contains new as well as old notes. If the same is done , the next question which arises is  whether the said information is only to be shared with RBI or accessible even to Assessing officer.  In future, the  AO who wants to conduct extensive inquiry in any suspicious case may make a requisition and the data may be made available to him through technology or on issue of notice u/s 133(6) to the Bank . It will be welcome move by Government to discourage the theory of rotation of money even further for any denomination but things would be clear once new Notes of Rs. 500/- are into full fledged circulation.

It is reiterated that the above letter is intended to encourage citizens to pay appropriate taxes without any panic especially created about levy of penalty of 200% and hence the “whole” letter is to be read in its words and spirit.

The author is overwhelmed  by the blessings received in the form of thousands of emails from all over the world and at the same time acknowledges the fact that the new demonetisation policy needs various measures for smooth implementation from the all type of Government bodies that should leave no scope for any casualties to life or property. 

 

77 COMMENTS

  1. Sir i am also a chartered accountant and i am very happy to see such a good reply from our fellow member. The step taken by the PM of India is looking a good step to curb the black money. This will bring a new fragrance in the economy of India. As you mentioned above that no penalty will be levied if everyone declares the income us 68 @ 30% tax rate, my concern is the reaction of people who declared income under the IDS scheme @ 45%. So i am bit confused about the provisions of Income Tax Act when they could declare the income at lesser rate then why they went for IDS.

    • IDS was for income of previous years for which wrong returns were already filed so higer rate of 45% whereas cash deposit now may be treated as current year income unless proved otherwise for which the return is pending and infact the year itself is pending.

      If you cannot prove the source of income still no penalty but if Department proves that this cash is pertaining to business income of some earlier year with exact document which is unlikely then penalty may be levied, but still then old provision of Section 271 (1)(c) applies wherein penalty can be deleted if bonafide explanation given. So its never 200% penalty.

      No amendment is expected in next budget because Vourts have already ruled out in past that Penalty cannot be applied retrospectively 🙂

  2. Kejri, tu ab politics chhod de. Bade log jab kuchh karte hai, to usme chhote baat nahi karte. Tu chaadar leke so ja munne!! Dusronka time barbad mat kar.

  3. Brilliant reply, Mr. Mehul Rasesh CA, you are awesome, extra ordinarily intelligent and truly patriotic. The country is proud of you!!!

  4. Dear Mr. Mehul Rasesh CA,

    Its a brilliant reply, Mr.Mehul Rasesh CA. You are awesome, extraordinarily intelligent and truly patriotic. The country is proud of you.

  5. Fantastic Explanation, Though not needed because even the common man can understand that it’s gonna hurt the corrupt but unfortunately AAP and Mr. Kejriwal is not any more common man. Loved your explanation keep it up Mr. Mehul

  6. Well explained….. but the question is what about the rich people that he has commented on the video and the Swiss accounta. ..can you explain that as well?

    • 1. Sir, I heard story of two Super Rich Families who had a Destination wedding planned with 1000 guest in Dubai with all cost borne by those families. One of the family cancelled their wedding and other reduced the same to 50 guests.

      The date of both the weddings fell in February 2017, which shows that the issue was not pertaining to lack of Rs. 100 Note but Black money.

      Do you still think that rich are not affected ??

      2. As for the Second issue –

      Even I am very hopeful that Govt should take quick action on Swiss Bank account holders

      But “Can you blanketly say that anyone who opens an account in Swiss Bank is Black money?? It is just a presumption which is 99% true. But Swiss Bank do not have anything stated in their form that Deposit Black money into us”

      Even if some action is taken under the Income tax Act, the cases shall be reopened u/s 147 but the person owning Swiss Account will never accept that it is his Black money and fight the case. The cases will go till CIT(A), then Tribunals and High Court and may be even Supreme Court wherein the average time period in total shall be around 12 years…..! Till that date they will get Stay from any recovery also as per Income Tax Law or even win the case through some very sharp lawyer….!

      So here is a Notification from our PM, wherein our Govt will get taxes by December 2016 or in 2017 on all Black money.

      And the catch is both the Swiss Bank decision and this decision are MUTUALLY EXCLUSIVE decisions.

      You cannot stop Surgery on an Indian Patient who can be cured just because you are not able to treat an NRI patient!!!

  7. The article not only clarifies the points raised by ‘some’ quarters on demonitisation, but also helps boost patriotism that is already aroused in millions of Indian hearts through the step to ‘clean’ India. The article is hence a step towards making a ‘Swachh Bharat’ economically and of course politically.

  8. Brilliant expiation !!!

    But Lower / middle class business man / shop keeper badly affected …

    Big fish was not affected …they r not interested to store black money in cash !!!

  9. Sir very good thought to support demonetisation and oppose mr kejriwal for his ill conclusion but i disagree with your logic too-
    1. If bank slip is available in second case then in first case also it can be made available.
    2. This adjustment can make very small amount of black money into white, such amount not even can be called black money instead of repetitive deposit he will opt for single deposit.
    Above is my personal opinion being in same field not to ctricise your nice thought to support the act.
    Note- You have a good platform and writing skills backing with profession why not spread it into social media as campaign i request you to tell people to keep their status at every place like whatsapp facebook twitter etc that i support demonetisation i support PM i support india
    Jai hind.

  10. Super Mehul… Very well articulated article… Your understanding of the logic and decodig the same and explaining it in simple language is commendable.

    There are many people like me who thinks that Modi has done the right thing but cannot understand logic.

    You are doing fabulous job of educating people of India including Kajriwal and Rahul Gandhi 🙂

    Please keep sharing your knowledge and insights.
    All the best.. Jai Hind

  11. Comment: Mehul Sir, I was expecting this from you…Very well explaination given to shut the mouth of AAP leaders….Proud to have studied under you…!!
    Tooooo goood answer to all of these people who oppose Modi…

  12. What a slap on Keju’s face by CA Mehul.It is explained in very simple language that a lay man can also understand…. Hats off to you Mr Mehul for spending your time to penned down this article in a mist systametic manner

  13. Brilliant one, Sir. In this scenario it is our duty to educate our clients and people in general as Finance and Tax professionals which include chartered accountants. I am disappointed to see many of professionals from varying designation and roles are taking undue advantage of lack of knowledge of people for earning discounts and commissions on cash. This should be discouraged as soon as possible.

  14. Excellent response Mehul. If this simple and better explanationation cant be understood by kejri then god bless him. One thing for sure is miracles doesnt happen overnight. We believe this change will definitely be screwing happiness of some people who are having sleepless nights

  15. Awesome explanation sir….i hope mr.kejriwal would understand this letter and if not he can consult even higher professionals…..As i am also a CA student, this is very basic to understand the merits of demonetization….Hope India for bettr india and lets make india a bettr place

  16. HI C.A.MEHUL, VERY WELL EXPLAINED WRITE UP. ACTUALLY THE EXPERTS CONSULTED BY MR GAPPU WERE COMMISSION AGENTS HIRED BY THEM TO CONVERT THEIR HARD EARNED BLACK MONEY BUT FAILED MISERABLY. IT WERE AAP REPRESENTATIVES WHO FIRST TO DECLARE ON NATIONAL TV THAT 1000 RS NOTE IS GETTING CONVERTED FOR RS 800 IN RETURN. SO EXPECTING THEM TO UNDERSTAND LOGIC AND PLANNING REQUIRED IN NATION BUILDING IS PURELY ILLOGICAL. KEEP IT UP.!!!

  17. Very proud of you Mr Mehul C. A, the way you have explained the reason is truly commendable and easily understood by any common educated men that why Rs200 new notes were monetized instead of 1000rs new notes. Well tried to slap MR IITian

  18. Too good..very well explained. I also thought that finally Mr. Kejriwal might say something positive but he opted not to and gave stupid comments. He has got the support for AAP to zero through his stupid actions just to grab attention.

  19. Thank ypu for a very good explanatory rebuttal to those who criticise Modi for the sake of criticism. Possibly a better explanation can’t be given. Let is hooe not just Aravind Kejriwal but the likes of him uncluding Rahul Gandhi will stop adversely commentinh the moves of Modi.
    As a Citizen of this great Country, INDIA am happy to undergo the small inconveniences being faced for the sake of the NATION atthis age of 62+.

  20. good one…. very detailed explanation…. not only to keriwalji but also to every common indian…. Yes… as Mr.somen said in his comment….it will take some time to release the 500Rs. notes…. I think these high denomination notes are also for the time being….

  21. Kejriwal is becoming crazywal he finds faults with every move of Modi government.Demonitization is the best move but not last.Instead of finding faults better give suggestions to central government to tackle the black money menace effectively, being formar IRS personnel.

  22. Excellent n high educational explanation. I am an ordinary inquisitive person and I could understand better. So for Kegrival n similar politicians This knowledge cannot go through properly to their minds in spite of knowledge. We r fed up with such anti-nation fellows. And thanks to Mr Mehul and we are proud to have people like u among us.

  23. It seems you are not aware of the deposit process for old notes. You need to fill in the cash-deposit slip(it contains the denomination and count of notes) and provide a valid id proof(PAN CARD). So the I-T department would just see what your are depositing(in this case every day 10X1000 notes). Now if you deposit 20K in a week, considering 9 weeks you can deposit max 1.8L.

    • That is the exactly the reason why I am praising PM for keeping limit on withdrawals.

      The people who are oppossing lower withdrawal limits should understand that rich people will rotate money if withdrawal limits are increased.

  24. WOW, simple and brilliant explanation… Thank you soo much.. Keep posting more such thoughts and explanations. Let us fight against corruption. This explanation makes people from other backgrounds understand the concept of this operation and fight against black money. Thank you again.

  25. Thank you CA Mehul Shah for educating the common man brilliant article that any common man can understand Salute you for this commendable job in the
    interest of our country

  26. Thank you CA Mehul Shah for this brilliant article in a language that even a common man understands salute for this commendable job in the interest of our country

  27. Well explained… But this Kejri is a virus to the society.. he think that wht he tell is correct nd rest all r wrong… This person doesn’t hv any work only known how to Poke… Really a true bastard

  28. Sir,i have a doubt,imagne that there is new 1000 notes instead of 2000 ,so mr. X gets 10 notes of 1000,which are new notes,so how can he deposit his old 1000 notes as bank knows he only have the new notes with him,
    So the case is same even if new 1000 notes were released

    • According to you , Bank knows means the cashier is going to remember you and next day will ask you – Kal wali Note ka kya kiya, pehle bata phir hi deposit karne dunga…! !! ??

  29. Xcellent article with lucid explanation…Even people from non-commerce background like me can understand each and every point clearly, don’t know about Kejriwal and forget about Rahul Gandhi. But, i will try to educate all my friends/colleagues those who are unable to understand the demonetisation step taken by Modi.. Jai Hind

  30. Hi Mehul sir,
    Thanks for sharing your conceptual clarification regarding 2000 currency notes, but sir as you are aware that government has all ready issued 500 New currency in circulation.
    So my question in that regard how the purpose will be defeated as per your logical understanding if a person is doing the same thing with the help of 500 new currency in their pay slip form.

    Regards
    Ca Rakesh Kumar

  31. Nice article by Mehul sir – even a lay man can understand the logic behind the 2k notes, but so called IITan Mr.Crazywal lacks !! I intially have a due respect on Kejriwal when he comes up with a party AAP, but with these comments it’s revealed that only the Title is good and no content inside!!
    And agreed, ppl are troubling in exchanging the notes and it’s just temporary, but Rahul Gandhi went to ATM queue in his luxury car to exchange his 4000 old notes – even his mom might laughs at this act! And for me, this blame game looks like ‘highlighting the vomiting sensation after a successful C section’

  32. Let me ask you a doubt which I have in mind about point 1.If the issuing of 2000 notes is so that this rotation can be prevented,why can’t it be applied on 1000 notes as well.If what I believe is right,the new 1000 notes issued by the government will have new design,new serial number etc…Is it not possible to catch the 2nd bundle deosited on day 2 using that?

    • Bank cannot stop someone while depositing money and I.T Officer scrutinises case after 2 years do not have time to tally Cash Note number, even if maintained anywhere. He would generally rely on cash book which shall show rotation of same cash.

      The thing is discouraging people to do this by issuing 2000 Rs. notes and bringing even Rs. 500 note after some days.

  33. Excellently written article. Such balanced and informative articles are very good signs for a healthy democracy. In the absence of such articles, social media gets flooded with cyber-lynching expressions. Congratulations and thanks to Mr. Mehul.

  34. Brilliant explanation. But did anyone commented on the idea of having “Expiry Dates” on Notes? I know expiry dates hurts everywhere, on Passports, on Driving Licenses, who would like to have them on Notes too. These days, no one even want to visit a bank branch. But if there are no expiry dates, then what’s the way to reduce black money (with new notes) accumulation from Jan 2017 onward?

  35. Good explanation sir. Now I understand the reason for introducing high denomination 2000 note. People must bear with some inconveniences to reap its full rewards.It’s a dream come true announcement from our PM. I fully support it.

  36. Hi this is a brilliant article/letter. Thanks for sharing and taking time to write this up. I hope now Mr Arvind Kejriwal understands. Kudos to you once again!

  37. Report from the Deccan Chronicle

    “A loophole in the Income Tax Act allows these illegal stash keepers to escape action. Majority of black money hoarders are now planning to take refuge under Section 270A of the Income Tax Act to safeguard their money and also escape punitive action. The section was added to the IT Act this year, financial experts said.

    If unaccounted cash is deposited in banks and 33% tax, including surcharge, is paid on this additional income, no penalty for underreporting or misreporting can be imposed by the revenue officer under section 270A of the I-T Act, chartered accountants told Deccan Chronicle.

  38. A sleeping man You can wake up.
    It is waste of time trying to wake up a man pretending to sleep
    It is waste of time and energy, just ignore him , next election people will ignore him.

  39. An excellent reply to Mr Kejrival ,all points clearly explained .it’s high time Mr kejrival starts behaving like responsible CM of Delhi ,people are intelligent & surely judge all politicians .If all common men are really affected ,take out rallies with their support.to oppose demonetisation . UP & Punjab elections will show all currupt politicians their actual worth .Barking dogs donot bite !! Don’t oppose for political gains. Once again kudos to you, Mr Mehul Shah.

  40. Idea was good, but the implementation was a total disaster…

    And the idea to circulate 2000 without any other denomination after 100 was affecting most of the people.

    I really wonder if this post still holds good.

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