 "Crowds gathered at an SBI ATM in Mumbai after declaration by PM Narendra Modi on the scrapping of Rs 500 and Rs 1,000 currency notes (Pic: Kamlesh Pednekar)")
Why this move to ban Rs 500 and Rs 1000 notes?
The Indian Government wants to stop terror financing and stop usage of fake currency in the economy. The Government hopes this will stop corruption in the government machinery as most of the bribes are taken in cash. This is the biggest move to curb black money since 1977 when a similar move was taken by the then Janata Party government.
What to do if I have Rs 500, and Rs 1,000 currency notes?
Go to the nearest bank branch or post office to exchange these notes with an identity card from Thursday. From midnight of November 8th, these notes will not be valid. You have time till December this year to exchange board. All electronic cards like debit/credit cards and payment gateways like PayTM will work. Cheques will continue to be in use. Banks and ATMs are closed on Wednesday to prepare and stock new currency notes. There is a ceiling of Rs 20,000 per person per week for exchange of cash.
Will I get an income tax scrutiny?
Yes, it’s possible. The banks will seek an identity card like Aaadhar when you go to exchange money. The information will be shared with the tax department.
So what’s the big deal with new design notes of Rs 500 and Rs 2,000?
The new notes will replace the old notes from November 10th. The cash hoarded by black marketers will be impacted as the banks will seek proof. There are no electronic chips in the new notes. Not easy to copy the secutiry features. The new notes are Braille complaint for use of blind people.
Will it impact real estate sector?
Yes, cash transactions in real estate sector will be impacted.
What about emergency use of cash in hospitals?
Government hospitals will continue to take cash for emergency but there is no clarity on private hospitals.
