Cash withdrawal and deposit rules as of 5 December
The latest updates on the rules regarding cash withdrawal and deposits in the wake of the Narendra Modi government’s demonetisation drive
Latest News »
- Govt, industry should team up to minimize disruption due to GST implementaton
- GST rollout from 1 July, but confusion still reigns among auto, FMCG firms
- Why didn’t Madhya Pradesh farmers gain from farm growth?
- NIPFP may help compute social obligation costs borne by Indian Railways
- GST is the new normal, but issues still remain: Nykaa’s Sachin Parikh
New Delhi: The Narendra Modi government on 5 December said that all toll plazas in national highways will receive payments through credit or debit cards from now on and e-wallet besides accepting old currency notes of Rs 500 till December 15.
Last week, it had cut short the deadline of using old Rs500 currency notes at petrol pumps and for buying airline tickets at airports till 2 December instead of 15 December announced earlier. The move has come at a time when bank unions have demanded that the Reserve Bank of India (RBI) increase the supply of notes to meet increasing demand for money as bank staff faces wrath of fatigued customers and continued cash shortages following the scrapping of Rs500 and Rs1,000 currency notes from 9 November. Earlier, the government had said sufficient cash is available with the Reserve Bank of India (RBI) and banks, and it is not considering extending the deadline of 30 December for deposit of demonetised Rs500 and Rs1,000 notes.
The new rules and highlights of the demonetisation drive as of 5 December are:
• All toll plazas in national highways will receive payments through credit or debit cards from now on and e-wallet besides accepting old currency notes of Rs 500 till December 15.
• With effect from 3 December, old Rs500 notes cannot be used for purchase of petrol, diesel and gas at the stations operating under authorisation of public sector oil marketing companies and for buying airline tickets at airport counters, a government notification said.
• The RBI on Wednesday announced that it will place cash withdrawal limits on Jan Dhan accounts a precautionary measure. The central bank said that on accounts which are fully compliant of the know your customer (KYC) norms—the monthly withdrawal limit has been set at Rs10,000.
• To curb hoarding of valid currency notes and increasing its circulation, the RBI in its latest notification allowed the withdrawal of the deposited sum in Rs2,000 and Rs500 notes, irrespective of the existing cash withdrawal limits.
• The proposed amendments in the Income Tax Act provide for black money declarants to mandatorily deposit 25% of the amount disclosed in anti-poverty scheme without interest and a four-year lock-in period.
• Those who choose to declare their ill-gotten wealth stashed till now in banned Rs500 and Rs1,000 currency notes under the Pradhan Mantri Garibi Kalyan Yojana 2016, will have to pay a tax at the rate of 30% of the undisclosed income.
• Additionally, a 10% penalty will be levied on the undisclosed income and surcharge called PMGK Cess at the rate of 33% of tax (33% of 30%).
• Further, the declarants have to deposit 25% of the undisclosed income in a scheme to be notified by the government in consultation with the Reserve Bank of India (RBI).
• The money from the scheme would be used for projects in irrigation, housing, toilets, infrastructure, primary education, primary health and livelihood so that there is justice and equality, said the Statement of Objects and Reasons of the Bill.
• For those who continue to hold onto undisclosed cash and are caught, existing provisions of the Income Tax law will be amended to provide for a flat 60% tax plus a surcharge of 25% of tax (15%), which will amount a levy of 75%.
• Besides, if the assessing officer decides he can charge a 10% penalty in addition to the 75% tax.
• The exchange of old currency notes over the counter at banks has been stopped. Exemptions for payment of utility bills , payments at petrol pumps and pharmacies using old notes will continue till 15 December. However, payments can be done only through old Rs500 notes
• The Reserve Bank of India (RBI) on Friday clarified that it will allow exchange of old Rs 500 and Rs 1,000 notes at its counters up to the limits applicable per person, even though this facility has been withdrawn from bank branches.
• The government on 23 November asked banks to waive the merchant discount rate (MDR) or transaction fee charged on debit card payments until 31 December to encourage more customers to use digital transactions.
• The government will provide Rs21,000 crore to district central cooperative banks (DCCBs) through NABARD to provide loans to farmers to meet their credit requirements during the winter crop season.
•Service tax will not be levied on tickets booked through the IRCTC website from 23 November to 31 December. Rs20 is levied as service tax on Sleeper and Rs40 on AC classes for booking tickets through IRCTC.
• RBI imposed stiff conditions for withdrawal of up to Rs 2.5 lakh in cash from bank accounts for weddings, saying the money can be withdrawn only from the credit balance as on 8 November, the day demonetisation was announced. While notifying norms, RBI said the cash withdrawn should be used only to make payment to those persons who do not have bank accounts and the names of such recipients should be mentioned while applying for withdrawal of the cash.
•Government employees belonging to Group-C on Monday started receiving Rs10,000 in cash as advance of their salary for the month of November.
• RBI has provided an additional 60 days for repayment of housing, car, farm and other loans worth up to Rs 1 crore.
• The income tax department has warned people against depositing their unaccounted old currency in someone else’s bank account. The newly enforced Benami Transactions Act carries a penalty, prosecution and rigorous jail term of a maximum seven years for violators.