Demonetization of Indian Currency

[LALIT MUNOYAT]

An open query for answer by the experts: CA Lalit Munoyat

After withdrawal of currency of ₹ 500/- and ₹ 1000/-notes w.e.f. 00:00 8^th Nov. 16, these currencies are no longer treated as legal tender. No one is supposed to deal in such currency except the exempted persons, entities. The non-exempted persons can only either exchange or deposit these currencies in their bank account. The query is as under:

1. Is it required that full sum of currency represented by above notes must be deposited in the bank account in one single installment at any time upto 30-12-16 Or

2. Can the full sum of currency represented by above notes be deposited in any number of installments upto 30-12-16 after initial deposit ?

The relevance of the query is that since these currencies have been withdrawn, then depositing it again and again may amount to dealing and accumulating these currencies after their initial deposit which is not permitted.

However the justification for depositing it in multiple installment are many like:

1. Cash is located at different places which are geographically far away from one another;

2. There is risk of security in carrying large sum of cash;

3. The banks levy cash transaction charges above a certain limit; etc.

The reply will clear confusion in many minds . Thanks

AI Summary

Clarification on Demonetization Deposit: Multiple Installments Allowed with Proof, One-Time Deposit Advised for Convenience A query was raised regarding the demonetization of 500 and 1000 notes in India, effective from November 8, 2016, questioning whether the entire sum must be deposited in one installment by December 30, 2016, or if multiple deposits are allowed. Concerns included cash located at different locations, security risks, and bank transaction charges. One response suggested deposits could be made in multiple installments, provided the source of funds is explained if queried by banks. Another response recommended a one-time deposit to avoid long queues, suggesting deposits at the nearest bank branch if cash is spread across locations.