By : M.S.Yatnatti Editor and Video Journalist Bengaluru : Modi Government may end up troubling common man as physical money is used by common man and big black marketers may use virtual currency bit coin to avoid the taxes as reported by few experts. Many countries have no income tax laws and they are growing more than India..Reportedly Bitcoin was launched in 2009 as an alternative to fiat currencies by an unknown computer scientist using the pseudonym Satoshi Nakamoto (n.d.). Bitcoins are not printed like fiat money, but instead are "mined” using computing power in a distributed global network of volunteer software developers. At its core, Bitcoin is nothing more than a digital file that lists every transaction that has ever happened in the network in its version of a general ledger called the "block chain.” Bitcoin is the first example of a growing category of money known as cryptocurrency in which open-source software solves complex mathematical calculations to mine more Bitcoins (Coin Desk 2013a). These "miners” make the Bitcoin network function by validating transactions and thereby creating new Bitcoins. This occurs when the Bitcoin network collects all the transactions made during a set period of time (usually every 10 minutes) into a list called a "block.” Miners confirm these blocks of transactions and write them into the block chain by competing against each other to solve mathematical calculations. Every time a miner's system finds a solution that validates a block of transactions, that miner is awarded 25 Bitcoins (Coin Desk 2013b). Every four years, this reward is halved so that the total number of Bitcoins will never exceed 21 million. The block chain is a shared public ledger on which the entire Bitcoin network relies. All confirmed transactions are included in the block chain. This way, Bitcoin wallets can calculate their spendable balance and new transactions can be verified to be spending bitcoins that are actually owned by the spender. The integrity and the chronological order of the block chain are enforced with cryptography. A transaction is a transfer of value between Bitcoin wallets that gets included in the block chain. Bitcoin wallets keep a secret piece of data called a private key or seed, which is used to sign transactions, providing a mathematical proof that they have come from the owner of the wallet. The signature also prevents the transaction from being altered by anybody once it has been issued. All transactions are broadcast between users and usually begin to be confirmed by the network in the following 10 minutes, through a process called mining.
Abolition of Income Tax is master stroke and surgical strike and not banning Rs 500 and Rs 1,000 notes .The countries which do not have income tax have no black money. They only tax service tax or tax on products sale. Indian Government taxes sale taxes services taxes income and taxing everywhere is problematic to citizens. Citizens of India are demanding abolition of Income Tax to increase savings rate and help economic growth and this will end the black money . If Prime minister does attack black money holder alone it can be called as surgical strike .But he is suspecting every citizen of India as black money holder and ask them to prove that they do not have black money is not surgical strike it is strike on the every faithful citizen and it is murder f faith of people .It unethical war on its own citizens .If someone uses knife to kill someone you can punish the culprit but Government have no right to ban the knife itself. If someone has black money you punish such individuals and not all good citizens. And this has come as a surprise to everybody. The citizens, the nation and even within most of the government!”.Ultimately this fails to combat corruption and black money as it just exchange and re-print the same money. The most important fact, however, is that the share of large-value notes has only been increasing over the years. While some of this is no doubt due to the natural growth expansion of our economy, On the other hand, what needs to be noted is that there's no good estimate for how much of India's black money is in forms other than currency/physical notes such as gold, jewellery, land or any other form of wealth. Therefore, while banning Rs 500 and Rs 1,000 notes will tackle the black money that is in the form of hard cold cash, it won't affect other forms of black money. On similar lines, this move will, obviously, have little effect on black money stashed away in foreign tax havens. Government wants to eliminate black money by scrapping the currency notes and but by re-printing them it is not gaining anything .As reportedly people have smart accountants in India who have expertise to guide citizens to get the black money in white and white inblack legally .Reportedly one accountant made 1000 fake company and they invested in real company of several thousand crore and made that single company have real white money and it is reportedly headed by a big politician and then question of getting black money out remains a big question. This, however, brings us to the larger question: Why do we need a Rs 2,000 note and a new Rs 500 note if the move is to abolish combat corruption and black money as these large-value notes were being used to finance corruption and fund terrorism and move towards a cashless society?
Minister Narendra Modi on Tuesday announced that Rs 500 and Rs 1,000 rupee banknotes would be withdrawn from circulation at midnight to crack down on rampant corruption and counterfeit currency. From November 10 till December 30 you can deposit the old notes at your nearest bank or post office accounts without any limit. RBI will issue new currency notes of Rs 500 and 2000 from November 10 onwards. These notes will have new design. Few experts state that this scheme of scrapping and re-printing the notes will only add expenditure to government but this will not eliminate black money.As previous government also did the same things .But no tangiblr results.UPA Government did exchange pre-2005 currency notes, including those of Rs 500 and Rs 1,000 denominations, at banks and the Reserve Bank of India (RBI) has asked the public to deposit the old design notes in their bank accounts or exchange them at a bank branch convenient to them during UPA Government . It is easy to identify pre-2005 notes. The currency notes issued before 2005 do not have the year of printing on the reverse side. In notes issued post 2005, the year of printing is visible at the bottom on the reverse.The rationale behind the move to withdraw banknotes printed prior to 2005 is to remove them from the market because they have fewer security features compared with banknotes printed after 2005, RBI said.It is standard international practice to withdraw old series notes.Post-2005 notes have added security features and help in curbing the menace of fake currency.Over 164 crore pre-2005 currency notes of various denominations, including of Rs 1,000 were shredded in regional offices of Reserve Bank in 13-month period ending January.The face value of the shredded currency notes was around Rs 21,750 crore. As per the details given in Parliament in March, 86.87 crore pieces of Rs 100, 56.19 crore pieces of Rs 500 and 21.75 crore pieces of Rs 1,000 were shredded.