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The relevance of the query is that since these currencies have been withdrawn, then depositing it again and again may amount to dealing and accumulating these currencies after their initial deposit which is not permitted.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

[DR.MARIAPPAN GOVINDARAJAN]

The entire amount may be deposited in one tine or it may be spread over for more than one time up to 31.12.2016. If the amount is a heavy one and if the bank asks for the source of money the same is to be explained.

The problems you have discussed is always there.

[Ganeshan Kalyani]

One time deposit of old curreny into bank account is advisable . atleast by knowing the pain of long queue.

In my view cash can be deposited in the nearest branch of any bank if cash is lying at different offices / locations .

For your concern in point b. i doubt that after demonitising old currency there is any risk of security . thanks.

AI Summary

Demonetization deposit rules permit single or multiple bank deposits until the prescribed deadline, subject to source verification. Withdrawal of specified high-denomination notes removed their status as legal tender, confining non-exempt persons to exchange or deposit those notes into bank accounts. Deposits may be made in a single instalment or spread over multiple instalments up to the prescribed deadline; banks may seek explanation or proof of source for large amounts. Multiple deposits within the authorised timeframe do not automatically amount to prohibited dealing, though one-time deposit is often recommended for practical reasons.