Effects of India's cash crackdown still uncertain

Author: Brian Yap | Published: 31 Jan 2017

The Indian government’s goal of removing black money from being in circulation will require the application of the country’s income tax laws, as there is no clarity between tax-exempted and illicit cash. 

Latest reports have shown that nearly 14 lakh crore ($217 billion) worth of now invalid 500 and 1,000 rupee notes, or 72% of cash previously in circulation, has been deposited with banks. But not all the banknotes deposited back into the system are illicit cash as this is something that needs to be determined by the government.

"Whether it is black money or money earned by people from legitimate sources will take some more time to assess," said Kumar Saurabh Singh, partner at Khaitan & Co...