Some gaping holes in laws come to light in the wake of demonetisation

New Delhi: Demonetisation and certain developments which took place in the wake of implementation of note ban order have brought into sharp focus some provisions in the Income Tax and some schemes like Jan Dhan Yojna which were open to misuse and which have been misused.

The government may change these provisions and or some other laws in the light of these developments to prevent their abuse in future. Demonetisation, thus, came as a blessing in disguise for the government to plug many such loopholes.

In the Tax act, there is a provision to exempt members of scheduled castes and scheduled tribes living in the North East and some other parts of the country from paying tax for income from any source. This also provided scope for money laundering.

The exemption has been granted to whole of Nagaland, Manipur, Tripura, Arunachal Pradesh and Mizoram and parts of Assam, Meghalaya and Jammu and Kashmir.

The recent seizure of banned Rs 500 and Rs 1000 notes of the order of Rs 3.5 crores in the NE region is believed to be a part of the racket. The money was carried by a Bihar resident which, he later claimed, was not his and named a businessman in this connection who owned it.

The businessman turned out to be a close relative of a top politician who claimed that he had disclosed this income and that he had acquired it by legal means, A probe is being held.

Additionally, zero- balance Prime Minister's scheme has been found as an escape route. Unaccounted income is being deposited in this scheme to withdraw later,converting it into white. A whopping sum of Rs 21,000 crores has been so far been collected under the scheme.

The deposits under the scheme during the last fortnight which were beyond any stretch of imagination are being probed.

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