Prime Minister Narendra Modi banned 500 and 1,000-rupee notes on November 8 with an aim to flush out black money and stop money laundering and counterfeiting of notes. The move took out 86 per cent of money in circulation or Rs. 15.44 lakh crore. More than 13 lakh crores in old notes has already returned to the banking system in deposits, the RBI has said.
With the government restricting the amount of money that people could deposit without scrutiny or exchange over the counter at banks and post offices after the sudden ban, there were reports of people with undeclared cash burning banned notes, submitting them in temples or simply abandoning them. There was report on old notes floating down the river Ganga.
The government has offered a one-time window for people to deposit their undeclared money in old notes and pay 50 per cent in tax and penalty. If they are caught by the taxman, they will pay almost 90 per cent of the amount they have.
A move last week to restrict deposits of old notes in the last few days before the deadline to 5,000 rupees without questions being asked, was withdrawn last week.
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(Sourced from agencies, feature image courtesy:enzuke.com)
