In a landmark announcement Govt of India has rendered Rs.500/1000 invalid legal tender. This has a widespread impact on how we transact in the society on day-to-day basis.
Lets look at some of the important aspects:
1) Cash in hand (Collections made till Nov 9): Deposit the notes in your bank account without any issue
2) Reassess if your society will fall into Service Tax bracket (Rs. 5000/month or Rs.60000/annum per flat) and do the needful registrations and declarations to avoid any complications
3) Move to electronic media for all payments collection (Either netbanking or preferably to a Payment Gateway to handle all modes(credit card, debit card, netbanking & international payments) )
4) Remember if you are depositing more than Rs.10 L in this financial year as cash in your account, you have a high probability of IT scrutiny and hardships
5) Ensure you have filed IT Returns for your Society
Keeping the above in mind we have to look into two aspects of money management and how you can do the peacefully:
Money Collections:
1) Preferable mode of payments should be electronic. Handling cheques and cheque returns is a big cost. You can also move to a payment gateway to handle all electronic payments including international payments( netbanking, credit cards, debit cards & international cards: Know more here )
2) In case you still are collecting cash, avoid collecting banned notes. Also ensure that you deposit all your collections and withdraw petty cash separately instead of using the collections directly.
Payments:
1) Use cheques or electronic payments for all payments as far as possible.
2) For payments to workers, ask them to create bank accounts and deposit the same in it.
3) Use small petty cash for any other services provided to you
4) Any recurring payments should be moved to electronic medium
Please find attached the benefits of using CommonFloor Groups online payments and comparison with other modes of payment. GET FREE ONLINE PAYMENT GATEWAY
We hope you have a smooth transition to electronic money management for your society. Please reach out to us to help you make the transition: Call 080 4278 2600 or SMS to +91 9901002797 or write to cf-groups-help@commonfloor.com
Disclaimer: This post is for general information perspective. Please talk to your Chartered Accountant for specific queries about your society.
image courtesy : hindustan times
