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Cashless Sweden: India has 86-percent cash transaction

Cashless Sweden: India has 86-percent cash transaction

Sweden is going to be totally cashless country by the year 2016 when currency-notes in that country will be rare to be seen. On the other hand, India is far-far behind with as much as 86-percent deals are through cash rather than banking transactions, main reason for parallel black economy and corruption. It is welcome that Prime Minister Narender Modi has expressed desired for a cashless system in the country. With his ambitious Pradhan Mantri Jan Dhan Yojna having highly successful crossing well over the fixed target, need is now for making it compulsory for every person to have a bank-account because now these can be opened even with zero-balance. Then not only all government-payments, but even salaries and other expenses by private parties above say rupees 5000 may also be compulsorily made through bank-transfers only, banning even system of payment through bearer-cheques. System of electronic bank-transfers should also be encouraged and popularised in tune with Pradhan Mantri Jan Dhan Yojna so that small-salaried persons may not have to wait for three days to get cash and also to avoid time in going to deposit-salary-cheques in their banks. Such a system will effectively check corrupt practices as well.

 

Notes of higher denominations of rupees 500 and 1000 are mainly used as unaccounted money. Currency in higher denominations does not exist in most of the advanced countries where most transactions are through banks. India should also discontinue currency in denominations of rupees 500 and 1000. Since property-deals practically have larger share of unaccounted money than that disclosed on papers, tax-laws should be simplified by providing a permanent voluntary-declaration scheme to declare as much income as possible from ‘undisclosed sources’ on payment of maximum tax-slab of 30-percent. This will catch hold of those purchasing property from unaccounted cash when tax-persons will find ‘income from undisclosed sources’ in tax-returns of those selling the property. Circle-rates should be somewhat higher than prevailing market-rates and should be reviewed and fixed after every three months. Stamp-duty should be charged at just two-percent of such fixed circle-rates irrespective of the deal shown on papers. Capital-gain should be reduced to ten-percent instead of present twenty-percent. Idea should be to have such low rates of stamp-duty and capital-gain so that people may volunteer themselves for clean fully accounted property-deals which in turn will give much-much more revenue than at present.

 

Since property-deals practically have larger share of unaccounted money than that disclosed on papers, tax-laws should be simplified by providing a permanent voluntary-declaration scheme to declare as much income as possible from ‘undisclosed sources’ on payment of maximum tax-slab of 30-percent. This will catch hold of those purchasing property from unaccounted cash when tax-persons will find ‘income from undisclosed sources’ in tax-returns of those selling the property. Circle-rates should be somewhat higher than prevailing market-rates and should be reviewed and fixed after every three months. Stamp-duty should be charged at just two-percent of such fixed circle-rates irrespective of the deal shown on papers. Capital-gain should be reduced to ten-percent instead of present twenty-percent. Idea should be to have such low rates of stamp-duty and capital-gain so that people may volunteer themselves for clean fully accounted property-deals which in turn will give much-much more revenue than at present.

 

MADHU AGRAWAL

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