Worried about what to do with old Rs 500 and Rs 1,000 notes in your wallet?
While you may still be scratching your head over it, a parallel economy is taking shape since Tuesday night to turn the black money into legally accepted white money, albeit hoodwinking the system.
For example, an Andheri-based aviation company-which sells and operates chartered planes to the rich and high fliers-on Wednesday began sending out messages to prospective buyers. “Buy an aircraft…just like you buy a car. Starting at Rs 3.5 crore,” said the message adding, “Rs 500 and Rs 1,000 notes accepted”. The aviation company, which recently launched a regional service in north India, also offers maintenance, parking, pilot and engineering services to the buyer at a monthly fee.
The company’s promoter refused to speak on record for obvious reasons. However, when asked if such large amounts of cash would be accepted, considering the fact that these planes come with an exorbitant price tag, making it difficult for buyers to escape Income Tax scrutiny, he said, “There are always ways to do it, you leave it to us.”
Even some Charter Accountants (CAs) are coming out openly to exploit the situation and ‘serve’ their clients. One such person, who claims to be a senior CA with over 30 years’ experience, has advertised his services against the ethical practices which the profession stands for.
A text message gone viral reads, “Convert your huge CASH with minimum tax liability and without any legal complications with free Income Tax filing. Contact CA XXXXX (30 years expertise)”.
When this correspondent called him, acting as a wholesale flower seller from Dadar wanting to turn cash over Rs 20 lakh into ‘white’, the person at the other end said he has decades of experience in dealing with such cases.
He further asked to visit his office located inside an upscale mall in Thakur Complex, Kandivli.
Explaining the modus operandi, insiders from the accounting and audit fraternity said that cash from the client will be put in a shell company under consultancy and or as labour services provided to the client. The shell company over the next few months (up to fiscal end) will show the cash under some or the other head. Eventually, the shell company pays back a certain percentage (around 70% of the original cash) against service/consultancy fees to the client’s family, relatives, aide.
In the second route, the accountant will approach a shell company that has shown fictitious cash on books. The cash will then be used to be shown as the amount being held with the client. This money then gets paid back to the client’s family, relatives, aide against service/consultancy fees.
It’s not just the white collar professionals who are indulging in such illegal activities as even small-time traders and shopkeepers are keen on making hay when the sun shines. A Dombivli-based media executive who went to buy a medicinal spray with a Rs 500 note was instead offered a ‘deal’ in exchange by the shop owner. “He asked me to forgo Rs 100 in return for getting a change during the transaction.”
“I walked out saying I will exchange it with the bank and then buy the spray,” said the executive.