Yearly income is declared, not assets, unless you're running for political office or something.
People do have lakhs in cash stored in houses from legit income because they don't have banks where they live. They've never kept records of sources because they've never been asked to by the government. All of a sudden we're telling them anything above one year's taxable income is suspect, and they may be thrown in jail for seven years if deposits exceed that amount.
I find it hard to believe that people with more than 1000000 in cash won't be bothered to deposit it in banks because they live somewhere where no banks and post offices exist. Government would be least of my worries with that much liability (theft).
This is an oversimplified view of things. One counterexample is house wives with alcoholic/abusive husbands who have been saving cash secretly. Another is people who are illiterate or otherwise too intimidated to walk into a bank. It's a sixth of the world's population; there are a million such stories.
You must be joking. We are a poor nation and you suggest poor people in India, living in backward areas with no banks have more than Rs. 1000000 in cash and there are millions of such "poor" people?
That's a straw man argument. I never said there are millions of families of four with 1000000 each. (By the way you can't deposit 250,000 in each of your kids' and family member's names under the new scheme; even if you gift them the money it is still assessed as the original earner's income). I said there are many, many exceptions that fall outside the half-assed line the government is taking - and in my point of view, it is not ethical to throw them under the bus even ostensibly to catch a few bad guys. In the meantime, the BJP is milking it for political mileage by splashing pictures of Modi on giant hoardings claiming he has destroyed black money singlehandedly (in rhyming verse!)
Ok I don't see how that was a straw man but ok, let me address the specifics then.
1) Housewives with abusive husbands -
No problem, just walk into a bank and deposit. Don't have a bank account? Open one on the spot, under Jan Than yojna you can have zero balance account.
2) Illiterate people -
They may be illiterate but they are not poor if they have more than 2.5 lacs cash. Open an account if you don't have one and deposit. I heard you will not be scrutinised for 2.5 lacs in each account (at most one per person) no matter what their age or whatever but I have no source for this right now.
3) Poor people -
If you have more than 2.5 lacs. You are not poor.
"even if you gift them the money it is still assessed as the original earner's income". Right and you don't have a problem because you saved up over time and so it is accounted money.
"the BJP is milking it for political mileage by splashing pictures of Modi on giant hoardings claiming he has destroyed black money singlehandedly". Come on, politicians will milk their perceived good deeds. I don't see anything wrong in it. I want to reinforce this mentality (do good get votes) through positive feedback.
You're making many assumptions about poor people having access to bank branches they can walk into (not always the case in remote areas, esp. now that co-operative banks are being left out of the process), about everybody having PAN cards (which you now need to open a new bank account), etc.
> Right and you don't have a problem because you saved up over time and so it is accounted money.
Here's the problem: I saved 5L over 10 years - reasonable, right? I don't have records of my expenses even if I have all my salary slips saved. How do I show the taxman that these are legit savings and not something I received as a bribe last month?
Let's not get into faith vs reason. I can accuse of you being closed to reasonable arguments since it is plain you haven't read or responded to specific points I have made, or are caught up on the news.
You need a PAN card as of Nov 17. No other card will do:
Your figure of 10 lakhs has no basis in fact. The threshold is 2.5 lakhs. You can't divide 10 lakhs into four family members (including yourself) with 2.5 lakhs each and be under the limit. This is not how income tax is computed. This kind of trick invites every depositee to be prosecuted under the Prohibition of Benami Property Act:
You can't even deposit more than 2.5 lakhs (cumulative) without a PAN card even if you had opened an account before. 20% of the country has PAN cards so far. What are the rest to do? Is there a guarantee that new cards will be issued in time to new applicants? Approx. time in the past has been 3 weeks to issue a PAN card. Edit: The deadline to deposit old notes is Dec 30. What choice do people without PAN cards have? Play dodge between the deadline and the issuance of a new PAN card, or find their nearest new-currency-launderer (changing old notes for new illegally, for a premium) and take a 30% hit on their savings, a percentage which will only go up as the deadline approaches?
People do have lakhs in cash stored in houses from legit income because they don't have banks where they live. They've never kept records of sources because they've never been asked to by the government. All of a sudden we're telling them anything above one year's taxable income is suspect, and they may be thrown in jail for seven years if deposits exceed that amount.