Recycling almost 85% of the currency of Indian Economy is considered as a very bold and historic decision by The Prime Minister of India and is welcomed by almost all the common Indian citizen. It is considered as a very important move to tackle the Counterfeit Money, Parallel Economy and Black Money. Although a lot of problems are being faced by the common people, most of them are supporting the move in the hope of a bright future for their country. For understanding the complete effect of demonetization and its relation with Income Tax we need to have a good knowledge on these two topics i.e. Counterfeit Money, Parallel Economy and Black Money.
This is the money which is ejected in any economy by the criminals or mafias in the form of fake currencies to weaken the economy and increase inflation. This is often considered as an indirect war strategy by different nations to weaken the economy of the other nation and in Our case our Neighbour Pakistan.
It is estimated by Indian Statistical Institute (ISI) that the quantum of counterfeit currency circulating in the nation 400 crores at any time. NIA has also provided the role of Pakistan in this regard after investigating this case. It is also estimated that fake currency worth Rs 70 Crore enters into India every year through Nepal, Bangladesh and Pakistan. However, this is also claimed that the origin of all these currencies is Pakistan and then they are injected in the Indian Economy through different routes.