There is a strong narrative being pushed, by those who want to discredit Demonetisation, that funds that has been deposited into bank accounts is all “white” money. This is not true. What matters, and how the distinction needs to be made between black and white, is to determine whether funds – held either in cash or in bank accounts – has been declared for tax purposes. What this means is that any amount – whether held in cash or deposited in your bank account – can be and is “white” money provided the funds have been declared in your tax return.
Based on analysis of data at their disposal, tax authorities have raised queries with more than 18 lakh bank account holders to explain the source of the funds deposited into bank account during the remonetisation period. The amount so detected reportedly runs upto some Rs 3.5 lakh crores. Till a satisfactory clarification is received by tax authorities, such amounts are being treated as unexplained black money. ]
There is also the claim by many who should know better is that only a minuscule amount of counterfeit notes have been detected and therefore there is very little or no fake notes. There has been a standard procedure in place for years that enjoins upon a bank branch to report any fake note tendered by a customer should be reported to the police. The police will conduct an enquiry to determine from where and how the fake notes came to be held by the customer. In practice, branches avoid getting their reliable customers into trouble by just returning the notes to the customer asking them to destroy them. The point is that fake notes in circulation do not come into banks, and to therefor claim on that basis that fake currency notes do not exist is wrong.
Tax authorities and the finance ministry are also aware that staff at several bank branches colluded with some well-heeled customers to fraudulently exchange their 500/1000 rupee notes using dormant accounts and shell company accounts. Jan Dhan accounts have also been extensively used to launder money. Ongoing investigations in this regard would certainly throw up anomalies.