Demonetization: High deposits worry IT officials

Prime Minister Narendra Modi in a strong move against black money, announced that old Rs.500 and Rs.1000 denomination notes will be rendered invalid from 12:00 am, 9 Nov.

People were given 50 days from 10 Nov to 30 Dec, to deposit their old notes in banks.

New notes of Rs.500 and Rs.2000 denominations were to be circulated from 10 November, 2016.

Old notes can still be used at several places. Toll Plazas, petrol-pumps and gas cylinder providers are still accepting old currency notes.

In addition all government-hospitals are accepting old notes, and so are all pharmacies as long as you have a prescription.

The old currency can be used to pay school-fees in government schools, mobile top-up, electricity bills and at railway & airline counters.

The government has stepped up measures to ease the burden of demonetization from the common man.

The Labour and Employment Ministry will help open bank accounts for workers in the unorganized sector to promote digital banking.

The Finance Ministry added that jewellery and gold bought out of disclosed income or legally inherited are not liable to be taxed under the new IT-Act amendment.

The RBI said it has recalibrated 1.8 lakh ATMs which can cow dispense the new denominations of currency; it said the remaining 20,000 ATMs will be recalibrated in a week.

The Centre also set up a 13 member committee of Chief Ministers to promote digital payments and improve financial transparency.

FM Arun Jaitley is looking into suggestions to help NRIs exchange their old notes.

ASSOCHAM has written to Finance Minister Arun Jaitley seeking the lifting of the cap on current account withdrawals for corporates; they contend that these transactions are documented and verifiable.

All-India Bank Employees Association and All-India Bank Officers Association sought a daily record of RBI's cash disbursements to various banks.

The government has been under increasing pressure to ease the burden of the cash-crunch.

The government hardened its defence of the demonetization scheme kicking-off a Rs.16 crore campaign to counter claims made by the opposition.

The BJP's youth secretary in Salem was caught with Rs.20.5 lakh cash including 900 new Rs.2000 notes, sparking fresh jabs from opposition parties.

Meanwhile, over 50,000 weddings scheduled for Sunday in Andhra and Telangana have been cancelled due to demonetization-woes.

The RBI is set to release new Rs.50 and Rs.20 notes with enhanced security features; the old version of notes will still be valid.

The new Rs.50 notes won't have inset letters in the number panels while the new Rs.20 notes will have the inset letter 'L' in both the number panels.

Both new notes will bear the signature of RBI Governor Urijit Patel.

Toll plazas across all national highways in India will accept payments through credit cards, debit cards, e-wallets; and old Rs.500 notes until 15 December.

The Home Ministry issued the directive and also deployed additional police cover for all toll plazas to avoid any breach of law and order.

The credit/debit card and e-wallet system were introduced in anticipation of currency shortage.

Several foreign missions have lodged protests with the government saying the cash crunch is affecting their functioning; Russia, the Dominican Republic, Bhutan and Nepal have registered formal complaints with the MEA.

With factory pay days on the 7th of the month, many factories' owners have expressed concern over payments.

Several factories even shut temporarily owing to lack of currency for paying workers.

The RBI stated that new 100 notes would soon be issued with additional security features; the old 100 notes would still be legal tender.

Meanwhile, universities across India are working toward going cashless, after the UGC advised them to only use demand drafts as a last resort.

Cashless systems will also be put in place for Universities to receive grants.

In a move to bolster the transition to a cashless economy, the Centre has waived service taxes on credit/debit card transactions up to Rs.2000.

This is because there has been a substantial rise in electronic payments since the demonetization move came into effect on 8 November.

The government seeks to promote the use of credit/debit cards for all transactions.

The Rajya Sabha was adjourned today after an uproar in the house over the demonetization process; BJP veteran LK Advani slammed the Centre, Opposition and the Speaker of the Lok Sabha for the logjam.

The RBI said that 95% of the country's ATMs have been recalibrated, but only 35% are functional.

The RBI added that 82.5% demonetized currency has been returned to banks.

In a surprise announcement, the government stated that demonetized Rs.500 notes will not be accepted at railways counters post 10 December.

The government had earlier allowed the notes to be used at public transportation offices including the railways until 15 December.

There has been no change announced in the use of the demonetized notes in any other public transport offices so far.

Deposits of the demonetized notes have so far reached 70% of the total value of currency that was demonetized; financial analysts say this means black money hoarders may have found a way to re-introduce their cash into the system.

Meanwhile, the IT department seized Rs.73 crore cash, including Rs.8 crore in new currency, and 100 kgs of gold bars from various locations across Chennai.