Farmers depositing money in banks will not be taxed: Modi after demonetisation

The farmers, who are depositing scrapped Rs 500 and Rs 1,000 notes in banks, are being misled that their income once deposited will be taxed, Prime Minister Narendra Modi said on Sunday.

According to reports, Modi once again stressed on the need to demonetise the high denomination currency while addressing the International Conference and Exhibition on Sugarcane Value Chain - Vision 2025 Sugar' in Pune. He said the announcement about the ban on Rs 500 and Rs 1,000 notes before November 8 would have defeated the very purpose of fighting corruption.

"An illusion is being spread, farmers are being misled that because of demonetisation, farmers depositing money in banks will have to pay taxes on them. I want to assure all the farmers, no tax will be levied on you. This country is yours, the money is yours, these banks are yours and so is Modi," he said.

"We could not have done it before November 8 otherwise there were chances of information being leaked. If the information was leaked, then the very purpose of the demonetisation would have been defeated as the hoarders would have found ways to get rid of the money," he said.

Modi had earlier on Tuesday said the move to scrap the notes was taken to combat corruption and menace of black money

He said the people voted against corruption in 2014. "I am doing what I was asked to do by the people of this country and it had become clear from the very first meeting of my Cabinet when I formed the SIT (on black money). We never kept the people in dark."

Hitting out at previous governments, the Prime Minister said they "neglected this ...we took a key step to help honest citizen to defeat the menace of graft."

The Centre has asked the public to exchange or deposit the defunct Rs 500 and Rs 1000 notes in the banks or post offices before December 30. It has launched Rs 2000 notes and new Rs 500 notes.