Prime Minister Narendra Modi on Tuesday announced demonetization of Rs 500 and Rs 1000 bank notes. The old currency notes can be exchanged for value with the new notes at the Reserve Bank of India or at any bank branch or at any Head Post Office or Sub-Post Office. Following the announcement, huge crowds have gathered in the banks and post offices for exchange. If you are you also planning to go to a bank to get your old currency notes exchanged, then you should read this post first. Here are 10 things you should know while depositing Rs 500, Rs 1000 in the bank.
10 Things You Should Know While Depositing Rs 500, Rs 1000 In The Bank
- You are allowed to deposit old currency notes of Rs 500 and Rs 1000 denominations between November 10 and December 30, 2016.
- While Rs 500 and Rs 1000 notes will now be illegal, all other notes and coins will continue to be valid.
- You can get your old Rs 500, Rs 1000 notes exchanged for value at any of the 19 offices of the Reserve Bank of India or at any of the bank branches of commercial banks/ Regional Rural Banks/ Co-operative banks or at any Head Post Office or Sub-Post Office. You can also deposit the old currency in Cash Deposits machines / Cash Recyclers.
- For exchanging old currency of up to Rs 4000, you can go to any bank branch with valid identity proof. If the exchange amount exceeds Rs 4000, then it will be credited to your bank account which is why it is preferable to go to the branch where you hold a bank account. You can also visit other branch of the same bank. If you are going to a bank where you do not hold a bank account, then you will have to furnish a valid identity proof and bank account details which will be required for electronic fund transfer to your account (if the amount exceeds Rs 4000).
- If you do not have a bank account, then you can get it opened by approaching a bank branch with necessary documents required for fulfilling the KYC requirements. You can also deposit the old notes in your friend’s or relatives account. However, for that you will have to carry along with you a specific authorization by the account holder and a valid ID proof.
- As a valid identity proof, you can carry with yourself any of these: Aadhaar Card, Driving License, Voter ID Card, Pass Port, NREGA Card, PAN Card, Identity Card Issued by Government Department, Public Sector Unit to its Staff.
- If your cash deposit amount is up to Rs. 2.5 laks, then you will get the same value of notes exchanged by credit in your bank account.
- If your cash deposit amount exceeds Rs 2.5 lakh, then you are more likely to attract the I-T department. If the amount deposited by you exceeds Rs. 2.5 lakh and does not match your declared income, then it will be considered as tax evasion. In such a case, your cash deposit above Rs. 2.5 lakh will be imposed with tax plus a penalty of 200 percent as per the section 270(A) of the income tax act.
- You need not worry about penalties while depositing an amount up to Rs. 2.5 lakh as it would be below taxable income. Furthermore, if your cash deposit is legally earned or previously withdrawn from bank and had been already disclosed, then must not worry about it. But if the cash that you are depositing is undeclared, then you will have to pay tax and penalties.
- Banks have been asked to keep the PAN card details of citizens depositing large amounts of cash till December 30. So, don’t forget to carry your PAN card if you visit the bank for exchange.
Update: The cash exchange limit over the bank counter has been increased from Rs 4,000 to Rs 4,500. The ATM withdrawal limit has been from Rs 2,000 to Rs 2,500 per day. The weekly withdrawal limit from bank account has been increased from Rs 20,000 to Rs 24,000. Moreover, the cash withdrawal limit of Rs 10,000 per day from bank has also been removed.