Ministry of Economic Affairs released a press release on 8th Nov 2016 in order to withdraw Legal Tender Character of Old High Denominated bank Notes (OHD) ie; Rs. 500 &Rs. 1,000, given below are the brief highlights of the Press Release
♣ Why withdrawal?
♣ What is the scheme?
1. Receipt from Customers cannot be accepted
2. Normal routine payments to vendors including the day to day household expenses cannot be made
♣ Operational guidelines to implement the scheme :
Exchange of OHD Bank Notes:-
Ex: MSD wants to exchange Rs. 44,000/- OHD Bank notes then the bank will give cash for Rs. 4,000/- and balance Rs. 40,000/- will be deposited to MSD’s bank account.
Deposit of OHD Bank Notes:-
Note: Under Indian Income Tax Act 1961 , if a person is unable to substantiate the source for the cash deposited in their bank accounts then the same will be consider as income of the person and :-
– No deduction for any expenses will be allowed against such income
– the same will be taxed @ 30% u/s 115BBE
– Penalty u/s 271(1)(c) upto 300% of the tax evaded
Withdrawal of OHD Bank Notes :-
Ø In addition to above a person can withdraw from ATMs upto a maximum of Rs. 2,000/- per card per day upto 18th Nov, 2016 , the limit will be raised to Rs. 4000/- from 19th Nov 2016.
In total a maximum of ,
Upto 18th Nov 2016 Rs. 16,000/- (2,000*8)
From 19th Nov to 30th Dec 2016 Rs. 1,68,000/- (4,000*42(after holidays))
Ø The scheme closes on 30th December 2016
Ø However were OHD Bank notesare not exchanged / deposited on or before 30th Dec, 2016 for any reason, the same can be exchanged / deposited along with necessary documentation as may be specified by the Reserve Bank of India in the RBI Offices.
Aadhaar Card, Driving License, Voter ID Card, Pass Port, NREGA Card, PAN Card, and other Identity Card Issued by Government Department.
Ø The exchange facility is available at all Issue Offices of RBI and branches of commercial banks/Regional Rural Banks/Urban Cooperative Banks /State Co-op banks or at any Head Post Office or Sub-Post Office.
Ø In case personal visit of the account holder is not feasible then any representative of the account holder with the written authorisation from the account holder can deposit / withdraw /exchange cash.
Ø In the following cases exceptions have been given to accept OHD Bank notes till Midnight of 11th Nov, 2016 to avoid public inconvenience:
• Government Hospitals and pharmacies in these hospitals
• Railway ticketing counters
• Ticket counters of Government/Public Sector Undertaking buses and airline ticketing counters at airports
• For purchases at consumer co-operative societies, at milk booths, at crematoria/burial grounds, at petrol/diesel/gas stations of Public Sector Oil Marketing Companies.
Various Indian & International organisations have estimated the size of unaccounted money close to 23% of the India’s GDP which increases the inflationary levels and brings more poverty.Through various measures to curb black money the government is trying to bring more money in the banking channels, whereby liquidity levels of Banks rises which invariably increases the lending power of banks to various business organisations and generate more employment& income generating opportunities. With the current move along with given fact of irrational business mind-sets and democratic public , the time frame provided to restrict the flow of such currencies looks highly difficult.
Change is Hard at the First, Messy in the Middle, Gorgeous at the End !!!
Request Slip for exchange of Old Bank Notes in denominations of Rs. 500/- and Rs. 1000/-
|Name of the Bank|
|Name of the Tenderer (In capital Letters)|
|Identity Proof Original to be shown at the counter (Tick the one applicable)|
|Identification Number (Number mentioned in the Identity Proof submitted)|
|Details of Old High Denomination Bank Notes submitted for exchange||Denomination||No of Pieces||Value|
|Total value in words:|
|Signature of Tenderer||