The Union Finance Minister Arun Jaitley today introduced the Taxation Laws (Second Amendment) Bill, 2016 with a view to tax unaccounted black money deposited in bank accounts pursuant to demonetisation. The salient terms of the proposal to tax the unaccounted cash are as follows: (i) 30 per cent tax on undisclosed income plus 10 per cent penalty as also a 33 per cent surcharge; (ii) 25 per cent of undisclosed income post demonetisation has to be deposited in the Pradhan Mantri Garib Kalyan Deposit Scheme; (iii) undisclosed wealth deposited post demonetisation which is detetcted by the income-tax authorities will attract 75 per cent tax and 10 per cent penalty. The money from the Pradhan Mantri Garib Kalyan Deposit scheme would be used for projects in irrigation, housing, toilets, infrastructure, primary education, primary health and livelihood so that there is justice and equality, states the Statement of Objects and Reasons of the Bill

CBDT comes into action for demonetization of currency. AIR details to be filed by banks and post offices with Income Tax Department by 31st January 2017, if cash deposited more than Rs. 12.5L in current a/c and Rs. 2.5 L in other than current a/c between 9.11.16 and 30.12.16

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES NOTIFICATION
New Delhi,
the 15th November, 2016
G.S.R 1068(E).-
In exercise of the powers conferred by section 285BA, read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:- 1. (1) These rules may be called the Income–tax (30th Amendment) Rules, 2016. (2) They shall come into force from the date of their publication in the Official Gazette. 2. In the Income-tax Rules, 1962 (hereinafter referred to as the said rules), in rule 114B, in the Table, for serial number 10 and entries relating thereto the following serial number and entries shall be substituted, namely:- 3. In the said rules, in rule 114E, ̶ (i) in sub-rule (2), in the Table, after serial number 11 and entries relating thereto the following serial number and entries shall be inserted, namely:- Sl. No. Nature of transaction Value of transaction (1) (2) (3) “10. Deposit with,- (i) a banking company or a cooperative bank to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act); (ii) Post Office.
Cash deposits,- (i) exceeding fifty thousand rupees during any one day; or (ii) aggregating to more than two lakh fifty thousand rupees during the period 09th November, 2016 to 30th December, 2016.”. Sl. No. Nature and value of transaction Class of person (reporting person) (1) (2) (3) “12. Cash deposits during the period 09th November, 2016 to 30th December, 2016 aggregating to ̶ (i) twelve lakh fifty thousand rupees or more, in one or more current account of a person; or (i) A banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); (ii) Post Master General as referred to in (ii) in sub-rule (5), the following proviso shall be inserted, namely:- “Provided the statement of financial transaction in respect of the transactions listed at serial number (12) in the Table under sub-rule (2), shall be furnished on or before the 31st day of January, 2017.”. [Notification No. 104/2016][F.No.370142/32/2016-TPL]
(Dr. T.S. Mapwal) Under Secretary to the Government of India

Note:- The principal rules were published vide notification S.O. 969 (E), dated the 26th March, 1962 and last amended vide notification S.O.3399(E), dated 07th November, 2016. (ii) two lakh fifty thousand rupees or more, in one or more accounts (other than a current account) of a person. clause (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898).”;

Beating cash crunch: e-transaction fees, ATM charges waived of

Task force under RBI Deputy Governor S S Mundra to recalibrate 200,000 ATMs; all-party meet likely today to reach out to Opposition The government on Monday advised banks and the National Payment Corporation of India (NPCI) to waive charges on e-transactions till December 31, to help out cash-strapped people hit by the demonetisation drive. Following this, NPCI waived till year-end the switching fee for all RuPay issuing and acquiring member banks for point of sales and e-commerce transactions. It has also decided to set up a task force, under Reserve Bank of India (RBI) Deputy Governor S S Mundra, to speed up the recalibration of 200,000 automated teller machines across the country so that these can dispense the new Rs 2,000 denomination currency notes. The old machines cannot do it because of a size mismatch. The decisions were taken after the government went into a huddle on Sunday night to address the crisis unleashed by its move to demonetise high-value currency notes last Tuesday. Late on Sunday, after delivering two high-emotion speeches justifying the reform, Prime Minister Narendra Modi met senior ministers, bureaucrats and RBI officers. The government has also decided to extend the use of the old Rs 500 and Rs 1,000 notes for utility payments till November 24. The earlier deadline was Monday. “Enough cash is available with the RBI. There is absolutely no reason… to panic. The supply of various networks will be improved in the days to come,” said Economic Affairs Secretary Shaktikanta Das on Monday morning. “The focus is further strengthening and activation of the network of business correspondents, the network of post offices, ATM networks and the network and reach of the banking system, activation and widening the facility of e-payment,” he added. The PM’s Sunday meeting went on till past midnight, and Cabinet ministers with different portfolios — home, urban development, information and broadcasting — as well as ministers of state for coal, power and finance. RBI Governor Urjit Patel and senior officers of the Prime Minister’s Office and the Union finance ministry were also present. Asked if the authorities were unprepared to deal with the side effects of the government move, purportedly to flush out black money hoarders, Das said that was not so. However, scenes of unrest and frustration of people queuing up outside banks and ATMs to get their old currency notes exchanged or withdraw cash for the first four days had a different tale to tell. Sources said the government and the Bharatiya Janata Party (BJP) were apprehensive of the fallout of the move, leading to law-and-order problems. But, leaders of the government and the party said people had been patient and public anger would subside when more currency notes are pushed into circulation in the days to come. Opposition leaders on Monday meet to strategise for the winter session of Parliament that begins Wednesday. They said they would raise the issue of demonetisation causing hardships to people and highlight reports that some BJP members had been warned about the drive. The government expects the first few days of the session to be washed out. An all-party meeting ahead of the winter session might be held on Tuesday. The government is likely to use that forum to reach out to the Opposition before the session begins. Das said the focus of the PM’s Sunday meeting was also on disbursement of cash in rural areas. The cash-holding limit for 120,000 banking correspondents, who form a crucial link in the rural monetary chain, has been increased to Rs 50,000 and banks have been given flexibility to increase this limit on a case-to-case basis. It has been also decided to provide cash multiple times to the banking correspondents. Supply of cash to 130,000 post offices would also be enhanced. However, Das clarified, higher cash withdrawal limit of Rs 2,500 was only for recalibrated ATMs. A large number of micro-ATMs would be deployed to help people withdraw cash through debit cards. To help small traders meet their business requirements, Das said the government has decided to increase the cash withdrawal limit to Rs 50,000 per week from current accounts.


(Business Standard)

FAQs on Withdrawal of Legal Tender Character of the existing Bank Notes in the denominations of 500/- and 1000/-

1. Why is this scheme introduced?
 The incidence of fake Indian currency notes in higher denomination has increased. For ordinary persons, the fake notes look similar to genuine notes, even though no security feature has been copied. The fake notes are used for antinational and illegal activities. High denomination notes have been misused by terrorists and for hoarding black money. India remains a cash based economy hence the circulation of Fake Indian Currency Notes continues to be a menace. In order to contain the rising incidence of fake notes and black money, the scheme to withdraw has been introduced.

2. What is this scheme?
The legal tender character of the existing bank notes in denominations of 500 and 1000 issued by the Reserve bank of India till November 8, 2016 (hereinafter referred to as Specified Bank Notes) stands withdrawn. In consequence thereof these Bank Notes cannot be used for transacting business and/or store of value for future usage. These Bank Notes can be exchanged for value at any of the 19 offices of the Reserve Bank of India or at any of the bank branches or at any Head Post Office or Sub-Post Office.

3. How much value will I get?
You will get value for the entire volume of notes tendered at the bank branches / RBI offices.

 4. Can I get all in cash?
No. You will get upto 4000 per person in cash irrespective of the size of tender and anything over and above that will be receivable by way of credit to bank account.

5. Why I cannot get the entire amount in cash when I have surrendered everything in cash?
The Scheme does not provide for it, given its objectives.

 6. 4000 cash is insufficient for my need. What to do?
You can use balances in bank accounts to pay for other requirements by cheque or through electronic means of payments such as Internet banking, mobile wallets, IMPS, credit/debit cards etc.

7. What if I don’t have any bank account?
You can always open a bank account by approaching a bank branch with necessary documents required for fulfilling the KYC requirements.

8. What if, if I have only JDY account?
A JDY account holder can avail the exchange facility subject to the caps and other laid down limits in accord with norms and procedures.

9. Where can I go to exchange the notes?
The exchange facility is available at all Issue Offices of RBI and branches of commercial banks/RRBS/UCBs/State Co-op banks or at any Head Post Office or Sub-Post Office.

10. Need I go to my bank branch only? For exchange upto 4000 in cash you may go to any bank branch with valid identity proof. For exchange over 4000, which will be accorded through credit to Bank account only, you may go to the branch where you have an account or to any other branch of the same bank. In case you want to go to a branch of any other bank where you are not maintaining an account, you will have to furnish valid identity proof and bank account details required for electronic fund transfer to your account.

11. Can I go to any branch of my bank?
 Yes you can go to any branch of your bank.

12. Can I go to any branch of any other bank?
Yes, you can go to any branch of any other bank. In that case you have to furnish valid identity proof for exchange in cash; both valid identity proof and bank account details will be required for electronic fund transfer in case the amount to be exchanged exceeds 4000.

13. I have no account but my relative / friend has an account, can I get my notes exchanged into that account?
Yes, you can do that if the account holder relative/friend etc. gives you permission in writing. While exchanging, you should provide to the bank, evidence of permission given by the account holder and your valid identity proof. 14. Should I go to bank personally or can I send the notes through my representative? Personal visit to the branch is preferable. In case it is not possible for you to visit the branch you may send your representative with an express mandate i.e. a written authorisation. The representative should produce authority letter and his / her valid identity proof while tendering the notes.

15. Can I withdraw from ATM?
It may take a while for the banks to recalibrate their ATMs. Once the ATMs are functional, you can withdraw from ATMs upto a maximum of 2,000/- per card per day upto 18th November, 2016. The limit will be raised to 4000/- per day per card from 19th November 2016 onwards.

16. Can I withdraw cash against cheque?
 Yes, you can withdraw cash against withdrawal slip or cheque subject to ceiling of ₹10,000/- in a day within an overall limit of 20,000/- in a week (including withdrawals from ATMs) upto 24th November 2016, after which these limits shall be reviewed.

17. Can I deposit Specified Bank Notes through ATMs, Cash Deposit Machine or cash Recycler?
Yes, Specified Bank Notes can be deposited in Cash Deposits machines / Cash Recyclers.

18. Can I make use of electronic (NEFT/RTGS /IMPS/ Internet Banking / Mobile banking etc.) mode?
You can use NEFT/RTGS/IMPS/Internet Banking/Mobile Banking or any other electronic/ non-cash mode of payment.

19. How much time do I have to exchange the notes?
The scheme closes on 30th December 2016. The Specified banknotes can be exchanged at branches of commercial banks, Regional Rural Banks, Urban Cooperative banks, State Cooperative Banks and RBI till 30th December 2016. For those who are unable to exchange their Specified Bank Notes on or before December 30, 2016, an opportunity will be given to them to do so at specified offices of the RBI, along with necessary documentation as may be specified by the Reserve Bank of India.

20. I am right now not in India, what should I do?
If you have Specified banknotes in India, you may authorise in writing enabling another person in India to deposit the notes into your bank account. The person so authorised has to come to the bank branch with the Specified banknotes, the authority letter given by you and a valid identity proof (Valid Identity proof is any of the following: Aadhaar Card, Driving License, Voter ID Card, Pass Port, NREGA Card, PAN Card, Identity Card Issued by Government Department, Public Sector Unit to its Staff) 21. I am an NRI and hold NRO account, can the exchange value be deposited in my account? Yes, you can deposit the Specified banknotes to your NRO account.

22. I am a foreign tourist, I have these notes. What should I do?
You can purchase foreign exchange equivalent to 5000 using these Specified Bank Notes at airport exchange counters within 72 hours after the notification, provided you present proof of purchasing the Specified Bank Notes.

23. I have emergency needs of cash (hospitalisation, travel, life saving medicines) then what I should do?
You can use the Specified Bank Notes for paying for your hospitalisation charges at government hospitals, for purchasing bus tickets at government bus stands for travel by state government or state PSU buses, train tickets at railway stations, and air tickets at airports, within 72 hours after the notification.

 24. What is proof of identity?
Valid Identity proof is any of the following: Aadhaar Card, Driving License, Voter ID Card, Pass Port, NREGA Card, PAN Card, Identity Card Issued by Government Department, Public Sector Unit to its Staff.

25. Where can I get more information on this scheme?
Further information is available on our website (www.rbi.org.in) and the website of the Government of India (www.finmin.nic.in)

26. If I have a problem, whom should I approach?
You may approach the control room of RBI by email or on Telephone Nos 022 22602201/022 22602944 [Source: www.rbi.org.in] 

1. Summary of the important announcement :
1. Black money issue,  500 rupees and 1000 rupees banned from Midnight of 8/11/2016.
2. ATM's wouldn't work on 9th and 10th November. Rather the withdrawal limit is Rs.  2000 only.
3. All Residents have option till 30th December 2016, to deposit their existing cash balance of 500 and 1000 rupees in their bank accounts.
4. ATM withdrawal is limited post 11th Nov to 10000 per day, but initial few days it would be 2000 Rs. Only.
5. Emergency periods like hospitals and chemist, train ticket booking and airline ticket booking,  petrol pumps may    accept the old notes to 11th November.
6. No changes in online,  card, cheque or any other plastic money transactions.
7. 9th November, banks wouldn't be available for public banking services.
8. New notes of 500 rupees and 2000 rupees would bring in circulation, mostly from 31st March 2017.