Depositing old currency notes? FM Jaitley says I-T dept won't harass small depositors

On day two of the Modi government’s demonetisation drive, Finance Minister Arun Jaitley again moved to reassure the public and reiterated that while there will be inconvenience for the next few weeks, small deposits made in banks will not lead to people facing any questions or harassment by the tax department.

"The revenue department will not take notice of small depositors but those possessing large amounts of money will have to be tax compliant," Jaitley said at the Economic Editors Conference on Friday.

The government had said on Wednesday that cash deposits above Rs 2.5 lakh could attract tax besides a penalty in case of income mismatch.

Jaitley also said that the government will meet its fiscal deficit target of 3.5 per cent of GDP for the year, but added that global ratings agencies have not fully appreciated the efforts made by the government.

This comes in the backdrop of two ratings agencies, S&P and Moody’s, ruling out a ratings upgrade through this year and next.

Also present at the conference were the senior secretaries of the Finance Ministry. Economic Affairs Secretary Shaktikanta Das said that the government will re-introduce Rs 1,000 banknotes in a few months and also issue new series of lower denomination bills with enhanced security features.

"In a few months, Rs 1,000 notes with new features will be brought into the market," Das said.

The currency notes of lower denomination of Rs 100 and Rs 50 will continue to be the legal tender, he said, adding that the Reserve Bank of India (RBI) will come out with a new series of such notes with new design and added security features.

The RBI, time and again, has been introducing new series of currency notes with new design and enhanced security features. Following the demonetisation of the currency notes of Rs 500 and Rs 1,000, banks on Thursday started distributing new notes of Rs 500 and Rs 2,000.