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Afraid of tax raids, Jewellers queue up before banks for cash deposits

After two days of mad rush to sell gold ornaments with outdated bill invoice, worried bullion dealers and jewellery retailers on Thursday were lined up outside banks for depositing Rs 500 and Rs 1,000 currency notes.
Barring select trustworthy and loyal customers with their previous deposits of cash, jewellers stopped accepting cash from customers in currency denominations of Rs 500 and Rs 1,000 notes. The finance minister’s statement on Wednesday regarding cash transactions and their link with the income declared in annual returns caused worry among jewellers about income raids in the future. Instead, jewellers queued up before bank branches to deposit cash they had accepted in the last two days. 
Thus, the popular Zaveri Bazaar here went almost out of business on Thursday, barring few transactions made through debit cards, credit cards or cheques being executed. The sentiment reversed in the last two days, from a very bullish wedding season ahead to a scary and lukewarm buying trend forecast.
"There is no business at all. Normally, jewellery is purchased with surplus cash which vanished suddenly from the market. We expect this sentiment to continue at least for the next six months, till the entire trade is transformed completely from cash to cashless. Thus, the entire wedding season is going to prove lacklustre this year,” said Kumar Jain, director, Umedmal Tilokchand Zaveri, a bullion dealer and jewellery retailer in Zaveri Bazaar.
Many jewellers, however, have stopped accepting cash since the deadline fixed by Prime Minister Narendra Modi of Tuesday midnight. While business has been very poor since then, all transactions are being done only in cheques or cards.
"We have stopped accepting cash since Tuesday midnight," said Ashok Minawala, director, All India Gems and Jewellery Trade Federation.
Finance Minister Arun Jaitley clarified on Wednesday that all deposits over Rs 250,000 will be reported to the income tax department and would be matched with the income declared by the individuals or corporate. Any mismatch, however, would be considered as tax evasion and would attract penalty of 200 per cent of the balance income tax liability, Jaitley said
Source - business-standard.com
Image Source - business-standard.com

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