Some FAQ’s by NGO’s, public & businesses regarding demonetization.

What public think about demonetization.
The unsung rewards of Indian Demonetization

Demonetization of bank currencies was one nimble execution that India was long awaiting. Though hurried action had created a lot of tension and confusions among the public, people embraced the idea in the succeeding days. Being an individual was fine because RBI was doing everything under their power to educate the people on ‘What’ and ‘How’. But many small-scale companies, manufacturers, employers, businesses, charity trusts, NGO’s etc. who doesn’t have a finance officer or professional in -house actually took the bite hard. Here are few FAQ’s that rolled across the internet regarding demonetization that would melt some ice off.

  1. Q) Can old denominations collected for a cause be deposited to banks?

Ans: Of course, you should deposit all currencies in the bank. If your organization is registered and working in par with all legal formalities there is nothing to worry. If in case any income tax inquiries are actioned just be sure with your paperwork’s.

  1. Q) What if someone approaches to launder money?

Ans: NGO’s & Charity trusts are the most targeted organization which people use to launder their black money in the present scenario, offering a percentage in return. But this is against the laws and the objective of demonetization is tampered which might put you in legal trouble.

  1. Q) Can we accept old denominations and back date it before 8th November?

Ans: Legally No. All cashbooks or accounts need to be legally sanctioned by the respective authority in order to avoid any confusion or legal trouble. In such case, backdating is not possible.

  1. Q) What to do with donation boxes in public places?

Ans: Many would donate their old currencies to NGO’s, that’s common. In order to keep your side clear, just record a video while opening and counting the money. Also keep something in the frame to prove the date like a newspaper of that day or google calendar etc. to prove the authenticity of date. Deposit the money immediately to the bank.

  1. Q) Should we accept large denominations as a donation?

Ans: Legally you shouldn’t. If they are insisting, ask to transfer the money online or using a cheque. This way you can avoid trouble if any income tax verification comes.

  1. Q) Can we use old denominations for a medical emergency?

Ans: RBI had issued orders to extend the legal validity of 500 rupee currencies to use under emergency situations on Government hospitals & pharmacies until December 15, 2016. However, the same is not applicable for private medical facilities or clinics. But several state governments had requested medical centers to not deny emergency treatment to any patients in absence of new currencies, which shall be dealt at a later point in time.

  1. Q) Where all can I use old denominations after 8th November?

Ans: Specified 500 rupee currency shall be used until 15th December 2016 at

  • Government Medical Facilities
  • Railway, public sector buses & airline counters
  • Purchase at the state or central government consumer stores (with a 5000 INR limit.)
  • Government authorized milk booths & gas stations.
  • Crematory & burial grounds
  • In pharmacies, providing prescription and proof of identity.
  • Purchase of LPG’s
  • For railway catering service
  • For entry tickets to monuments managed by Archeological Survey of India.
  • Fees, penalties, taxes, charges etc. to Central Government, State Government or Local municipal bodies.
  • Paying arrears or current electricity/water bill.
  • Court fees.
  • Agricultural purchases (seeds, fertilizers etc.) from government bodies.
  • School fees for Public sector schools limited to INR 2000/ student.
  • Semester or Exam fee payment in Govt. Colleges & Universities.
  • Pre-Paid Mobile Top-up limited to INR 500.
  • Toll payment in plazas under Ministry of road transports and Highways.
  1. Q) Can I pay my bank loans using old currency?

Ans: There is no restriction to deposit money into your bank account. If you have a deposit above INR 50,000 then you must provide a copy of your PAN card, if not linked previously. So deposited money can be used for all sorts of transaction including loan payment, other than liquid withdrawals subjected to RBI revision.

  1. Q) How about using Cash Depositor Machines in the bank?

Ans: You are free to use CDM’s or Cash Depositor Machines by respective banks to deposit money into your account. It is more like electronically depositing cash rather than visiting the deposit counter in the bank. But most CDM’s are limited to INR 50000.

  1. Q) What about marriage expenses?

Ans: Many queries have arisen regarding marriage and related expenses. Marriage dates are mostly fixed before November 8th and sudden demonetization notification sends many into a panic. No need for worries, all transactions shall be done using electronic fund transfers like NEFT, RTGS, IMPS, UPI, Net Banking, and Bank Wire. A cheque can also be used to meet the expense. Also, to meet local demands a person can withdraw up to INR 250000/- from their bank account provided the marriage date in before 31st December 2016 and the person is KYC compliant with the bank.

  1. Q) How farmers will continue with their operations?

Ans: To ensure unhindered agricultural operations RBI allow farmers to withdraw INR 25000/- per week from their loan account (including Kisan Credit Card limit) or savings account provided they are fully KYC compliant. The specified notes (demonetized) shall also be used for the purchase of farming needs from Government bodies.

  1. Q) What if I’m out of the station, but has some specified note in possession?

Ans: You may provide a hand written request letter to the bank manager about entrusting one of you close companion to deposit the money to bank account. The so entrusted person should bring a Proof of Identity at the time of deposit.

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