In this episode of the Tax Experience Series, Adhitya Srinivasan and Mr J.B. Mohapatra, former Chairman of the CBDT, examine the RBI’s decision to withdraw ₹2,000 bank notes from circulation and review the various anti-cash provisions in the Income Tax Act, 1961. Join us as we discover the motivations and implications of the RBI decision as well as the measures adopted under the Income Tax Act to discourage cash transactions.

(00:00) Intro
(01:04) How is cash regulated?
(01:49) Black & White Money
(04:29) How does the cash come into circulation in the economy?
(06:54) Unrecorded economy, unreported economy and illegal economy
(10:50) Hoarding and transacting in cash
(12:51) Financial Privacy & Anonymity
(21:42) How do multiple agencies collaborate on analysing financial data
(24:08) RBI withdraws ₹2,000 notes from circulation
(25:56) Contrast between 2016 and 2023
(26:41) Why withdraw ₹2,000 bank notes if they remain legal tender?
(36:10) Low percentage of ₹2,000 bank notes in circulation
(38:27) Demo 2016 led to more financial data collection
(43:07) Expected benefits from 2023 withdrawal of ₹2,000 notes
(43:55) Does the Income Tax Act discourage cash transactions?
(47:26) Cash transactions: Shut down vs. Monitor
(49:51) Anti-cash provisions in the Income Tax Act
(56:16) Prohibition on cash receipts of >= ₹2,00,000 per day
(59:16) Cash in Politics and Elections
(1:04:51) ‘Your account should not be the storehouse of someone else’s money’
(1:12:23) TDS on bank withdrawals
(1:15:55) Incentivising businesses to go cashless
(1:20:05) Assessing the impact of anti-cash provisions
(1:21:39) Final thoughts

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