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With the overnight demonetisation of high currency notes, Indians are now finding newer ways to settle large amounts of cash in their possession before all they have turns into merely a piece of paper. 
 
It’s almost an amusing irony that in this fight against corruption, now even non-corrupts are finding ways to earn some extra bucks by helping people with unaccounted and black money in converting their old notes into new. 
 
You would be amazed to know the tricks people are using to get rid of their black money: 
 
1. Depositing money in the bank accounts of people with no or negligible income: 
 As declared by PM Modi where deposits exceed Rs 2,50,000, an inquiry will be made by the <keyword id="65338" type="ORGANIZATION" weightage="100" keywordseo="Income-Tax-Department">Income Tax Department</keyword> regarding the source of such income and it will be matched by the <keyword id="6354751" type="COMPANY" weightage="100" keywordseo="Income-Tax">Income Tax</keyword> Returns filed by you. So, to leverage this, people are looking for bank accounts where they can park their unaccounted cash by paying them some commission ranging between 10% to 25%. 
 
The most-in-demand are salaried class employees and people from rural areas, as they generally have a good or no track record with the Income Tax Department. 
 
2. Hiring people to stand in queues for exchanging their old notes: 
 
People are standing in queues for well-off people against 300-500 bucks for exchanging their old notes, but this business is likely to stop from now on thanks to the government’s decision of marking fingers with ink of those exchanging notes. 
 
3. Exchanging old notes by visiting multiple branches of multiple banks on same day: 
 
To stop this, now even the government has taken the decision of using indelible ink to mark fingers of those who have exchanged old notes so that there is a reduction in the crowd at the banks. 
 
4. Purchasing Gold, Properties and Electronics in black by paying extra premium: 
 
Gold is selling at more than 60,000 per 10 gm, twice its actual value and properties are being sold by the builders and contractors at more than their fair value against old currency notes. Same with electronic items like mobile phones, laptops where sellers are accepting old notes at a premium and showing sales in backdated invoices. 
 
5. Arranging IDs of friends, relatives and closed ones and entering into arrangements with Bank officials: 
 
Some people are taking an extra mile by arranging numerous IDs and then getting in arrangements with bank officials. Then they are exchanging their old notes with new notes against all the IDs at once. So, that way they are exchanging up to 4,00,000-5,00,000 worth of their old notes in one single day. 
 
6. Paying Advance Salaries to the trusted employees: 
 
It’s a very simple way of converting old currency into new currency for the businessmen as they’re paying their old and trusted staff advance salary in old notes which the staff is depositing in their account, interest on it being their extra income. 
 
7. Offering Interest-Free Loans to relatives and friends: 
 In a bid to park enormous cash funds, people are approaching their relatives, friends and other known persons if they want some extra interest free funds which they can repay later after the air of <keyword id="6362150" type="UNKNOWN" weightage="100" keywordseo="demonetization">demonetization</keyword> and Income Tax inquiry settles down. It’s a win-win situation for both the parties. 
 
8. Donations at Religious Trusts: 
 
People are giving a donation with their old notes at temples, mosques, church and other religious places. After donating, they get into tie-ups with the accounts officials of that place and in exchange for 20%-30% commission, get new currency or Rs 100 notes. 
 
9. Trying to keep the High balance of cash in hand in the Books: 
 
This is one other trick used by the businessmen where they’re inflating their back dated sales and booking them as cash sales so that they can show handsome cash balance in white. Then they’re depositing this cash balance in their current accounts as proceed from sales. 
 
10. Alliance with Political Parties 
 
Do you know that political parties enjoy an interesting exemption - They are not required to furnish the source for donations received for Rs 20,000 and less? So, anyone having an alliance with a political party can very conveniently exchange/donate black money or unaccounted money against some commission without any risk to both the parties. 
 
With government’s strict stance on this matter and the newly amended Benami Act (which prohibits transactions which are done in other’s name through illegal means like buying property in your servant's name etc.), and the upcoming amendments in Budget-2017, it will be wise to take any action only after considering all consequences and penalties that may arise in future. We strongly recommend that you should not get into such things as you never know when you can be penalised for it. 
 
(The article has been originally authored by Vertika Kedia, co-founder of a taxation startup <a href="https://tax2win.in/">Tax2win.com</a>. Tax2win is an online fintech startup which offers one-stop-shop for anything and everything related to taxation which includes Income Tax Return filing, Income Tax Planning and much more.)

10 mindblowing 'Jugaads' only Indians can do to get rid of their black money

<ul><li>If the <keyword id="118926" type="General" weightage="20" keywordseo="remittance" source="Orion">remittance</keyword> for <keyword id="382324" type="General" weightage="20" keywordseo="foreign-education" source="Orion">foreign education</keyword> exceeds ₹7 lakh and is funded through a <keyword id="6360217" type="General" weightage="20" keywordseo="loan" source="Orion">loan</keyword>, it will attract a <keyword id="6357150" type="General" weightage="20" keywordseo="tcs" source="Orion">TCS</keyword> rate of 0.5%. </li><li>If remittance is from one’s own funds, TCS shall apply at the rate of 5% on remittance above ₹7 lakh. </li><li>The TCS paid is adjusted against your total tax liability when you file your return of income.</li></ul>If you're currently in the midst of securing funds for your children's international higher education, you can rest easy knowing that the upcoming higher 20% tax collected at source (TCS) regulation, scheduled to come into effect on October 1, 2023, won't be a cause for concern. The <keyword id="47209" type="General" weightage="20" keywordseo="finance-ministry" source="Orion">finance ministry</keyword> has offered a reassuring guarantee that this elevated TCS rate will not be applicable to expenditures associated with overseas education and medical necessities. Your children's educational expenses abroad will remain unaffected by this tax change. Having said that, let us take a look at how any remittance made for the purpose of your kid's education will attract TCS. There are two broad categories in this – self-funded and loan-funded education. <cmsannotation type="cmsannotation" annotationid="What constitutes education remittance?" comment="Subhead" text="What constitutes education remittance?">What constitutes education remittance?</cmsannotation> “Any remittance for the purpose of education be it for accommodation, travel, food etc is treated at par as remittances for the purpose of education,” says Divakar Vijayasarathy, CEO and Founder, DVS Advisors, a tax-centric professional services firm. Remittance for the purpose of education shall include, remittance for purchase of tickets of the person undertaking study overseas for commuting between India and the overseas destination, the tuition and other fees to be paid to the educational institute; and other day to day expenses required for undertaking such study. <cmsannotation type="cmsannotation" annotationid="When the education is funded through loan" comment="Subhead" text="When the education is funded through loan">When the education is funded through loan</cmsannotation> Remittances below ₹7 lakh intended for educational expenses do not incur any TCS. In other words, there is no TCS for such transactions. “If the remittance for foreign education exceeds ₹7 lakh and is funded through a loan obtained from an approved financial institution, it will attract a TCS rate of 0.5%. This means that 0.5% of the amount exceeding ₹7 lakh will be collected as TCS,” says Vertika Kedia, co-founder, Tax2Win, an income tax portal. For example, if you are remitting ₹10 lakh abroad for foreign education and the remittance is funded through a loan obtained from an approved financial institution, you will be required to pay TCS of ₹1,500 (0.5% of ₹3 lakh). <cmsannotation type="cmsannotation" annotationid="When education is self-funded" comment="Subhead" text="When education is self-funded">When education is self-funded</cmsannotation> “If remittance is from one’s own funds, TCS shall apply at the rate of 5% on remittance over and above ₹7 lakh. Refund of TCS can be obtained only upon filing return of income for the relevant year,” says Vijayasarathy. If you are remitting ₹10 lakh abroad from your own funds, you will be required to pay TCS of ₹15,000 (5% of ₹3 lakh). You can only get a refund of this ₹15,000 by filing your return of income for the relevant year. It is important to note that TCS paid in both the above cases is not an additional tax. It is simply a way of collecting tax at the source. The TCS paid is adjusted against your total tax liability when you file your return of income. If you have already paid more tax than you owe, you will be eligible for a refund. <cmsannotation type="cmsannotation" annotationid="How to reduce the impact of TCS" comment="Subhead" text="How to reduce the impact of TCS"> How to reduce the impact of TCS </cmsannotation> “If both parents are contributing to the education expenses, they can each utilise the ₹7 lakh threshold limit. This effectively allows a higher total amount to be remitted without incurring TCS,” says Kedia. One can also involve grandparents for additional remittances: Involving grandparents or other family members in funding the education can further increase the exemption limit. Each family member can utilise their own ₹7 lakh exemption. As we have seen, funding higher education overseas through an education loan reduces the impact of TCS. Consider financing your education through an education loan. This will allow you to benefit from the lower TCS rate of 0.5% specifically designed for education loans. Additionally, you can avail benefit under section 80E. .

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10 mindblowing 'Jugaads' only Indians can do to get rid of their black money

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Explained: TCS on your child's overseas education and mitigating strategies

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