Scrapping Rs 500, Rs 1,000 Notes A Bold Decision: Black Money Investigation Team

New Delhi: The Special Investigation Team (SIT) on black money on Tuesday called Prime Minister Narendra Modi's announcement of demonetisation of Rs 1,000 and Rs 500 notes with effect from midnight a "bold" step, saying this would help in curbing the menace of stash funds.

"This is a very good decision. It is a bold step and will help to curb the menace of black money," SIT Chairman Justice (retd) MB Shah told PTI.

He said those people "holding untaxed assets and income" and who did not declare it under the two black money declaration windows announced by the government in the last two years "will suffer".

"Those people who have accumulated black money through corrupt means ... such money was in a few hands ... they will be affected and that is a good thing. At this time, this is a very good step taken by the government," he said.

"Such a step was necessary," Mr Shah said.

The SIT on black money was notified by the government, on the directions of the Supreme Court, in 2014.

In the biggest ever black money disclosure, at least Rs 65,250 crore of undisclosed assets were declared under the one-time compliance window, also called the Income Declaration Scheme (IDS) that ended on September 30.

Last year, under a similar scheme for foreign black money holders, 644 declarations of undisclosed foreign income and assets were received, and just Rs 2,428 crore was collected in taxes.

However, senior Income Tax department officials have said that despite these two windows being operationalised the taxman was encountering black funds during their search and survey operations including a recent search in Kolkata where a businessman who declared Rs 3 crore under IDS was caught with possessing another Rs 30 crore untaxed assets.