Previously, banks were required to report to the I-T Department only when cash deposits in an account exceeded Rs 10 lakh in one full year.
But in view of apprehensions that large number of illegal or black money may sought to be converted into white during the window provided till December 30, the Revenue Department has issued fresh set of instructions, a top official said.
“The attempt will be not to harass honest citizens who are free to tender all of their legal, old high-denomination currency savings in their bank accounts and get new ones,” he said.
But the window provided to them will also be not allowed to be misused, he said, adding that the Income Tax Department is keeping a close eye on all high-value deposits.
Those depositing large amounts of unaccounted money will have to face the consequences under tax laws, which provide for a 30 per cent tax, 12 per cent interest and a 200 per cent penalty.
Earlier in the day, the Finance Ministry came out with newspaper advertisements assuring people that their hard earned money is safe and that depositing junked Rs 500/1,000 notes of up to Rs 2.50 lakh in bank accounts will not be reported to the tax department.
It also cautioned people against depositing the money of unknown people in their own accounts or falling prey to cheats, thugs and rumour mongers.
Besides, the ministry said, farm income continues to remain tax free and can be easily deposited in bank.
Small businessmen, housewives, artisans, workers can also deposit cash in their accounts without any apprehensions, it added.
“Deposits up to Rs 2.50 lakh will not be reported to the Income Tax department. There will be no harassment or investigation. All honest citizen need not worry. Farmers’ income is tax free and can be easily deposited in bank,” the ministry said in newspaper ads.
In its biggest crackdown ever on black money, the government on Tuesday night announced demonetisation of Rs 500 and Rs 1,000 notes and asked people holding such notes to deposit them in their bank accounts.
Enough currency with banks for exchange: RBI
Mumbai: As millions queued up outside banks and at ATMs, which opened after two days on Friday, Reserve Bank of India (RBI) said enough is cash available for exchanging the scrapped Rs 500/1000 notes and asked people to be “patient”.
“There is enough cash available with banks and all arrangements have been made to reach the currency notes all over the country. Bank branches have already started exchanging notes since November 10, 2016,” RBI said in a statement.
Reserve Bank of India said that consequent to the withdrawal of Legal Tender Character of existing Rs 500 and Rs 1000 Bank Notes, it has made arrangements to distribute the notes in new Rs 2000 and other denominations across the country.
The central bank conceded however that it may take a while for banks to recalibrate ATMs and once that is done, “members of public will be able to withdraw from ATMs up to a maximum of Rs 2,000 per card per day up to November 18, 2016”. After that, they will be able to withdraw up to Rs 4,000 a day per card.
Several ATMs have started functioning from Friday morning as the banks could complete recalibration of these machines to allow withdrawals up to Rs 2,000 to begin with.
There were huge queues outside the banks for the second consecutive day on Friday after the government scrapped Rs 500/1000 notes to combat black money.
Amid the woes of the harried customers, a 73-year-old person, Vishwanath Vartak, reportedly died in a suburb of Mumbai while standing in one such queue.
Meanwhile, State Bank of India chairperson Arundhati Bhattacharya said her bank has collected Rs
53,000 crore (from November 10 till around 2 pm on November 11) after the demonetisation of higher value currency. State Bank of India has also exchanged about Rs 1,500 crore worth of currency.
Cash management agencies hope to normalise ATMs ops in 2 weeks
Mumbai: Cash management agencies that move billions of rupees in and out of over 2.2 lakh ATMs across the country have started a major exercise that may see Rs 40,000 crore worth of notes being shifted around and hope to normalise operations for the public in two weeks.
“We will put in three times normal efforts to ensure the inconveniences end at the earliest,” Rajiv Kaul, Managing Director and Vice-chairman of CMS Info System, which owns over half of the cash management market, said on Friday.
He said a high-level meeting was held at the Reserve Bank yesterday, which went on till late in the evening, to draw up an action plan of reducing the distress among the public.
A senior official said the meeting was chaired by Deputy Governor R Gandhi and also had representatives from the cash logistics association and confederation of ATM management companies, apart from officials from NPCI and RBI.
The work to be undertaken includes removing all the Rs 500 and Rs 1,000 notes, which account for 90 per cent of the currency at ATMs, and replenishing them with Rs 100 notes, carrying out changes at the Switch level to ensure banned notes are not dispensed and reconfiguring the machines to handle the newer Rs 500 and Rs 2,000 notes.
Asked about the cash that will be handled as part of this exercise, an official from CMS, who was present at the meeting with RBI, estimated that up to Rs 40,000 crore of high-value banknotes will be evacuated while Rs 4,000 crore of Rs 100 denomination bills will be put into the machines.
With ATMs failing to re-open at many places, the queues at bank branches on Friday just got longer than the previous day.
Braving the hot sun, the harried public waited patiently in the long queues to get the old Rs 500 and Rs 1,000 bank notes, which have been demonetised with effect from November 9, exchanged or withdraw cash for daily expenses.
The cup of currency woes for the public is brimming over.
As per the RBI timetable, ATMs were to re-open on Friday after getting re-calibrated to dispense Rs 100 and Rs 50 notes. ATM’s were closed for the last two days.
“The public will keep facing troubles as ATMs can hold only a limited number of Rs 100 notes and will have to be reconfigured. In the next 3-4 days, the operations will be normalised by 60 per cent and in the next two weeks, it will be normal,” the official said.
Generally, one among the 8,000 vans visits an ATM around 12-15 times a month. These visits will go up to as much as twice daily, the official said, adding that a decision has been taken for using even the unclean Rs 100 notes.
While banning the Rs 500 and Rs 1,000 banknotes to act against black money, the government said over Rs 16 trillion cash is in the system, of which over 85 per cent are held in high-value denominations.
Announcing the move, Prime Minister Narendra Modi had said there would be difficulties in the short term, but it would deliver good over the longer term.