Modi Government likely to come with an ordinance restricting use of old notes

New Delhi, 26 December: With the old currency notes of Rs. 500 and Rs. 1000 useless and set to be become completely illegal post December 30, the government is likely to come up with a new ordinance banning the possession of the old currency notes.

According to news reports, the government is planning for a new ordinance on holding of old notes and is likely to come up with it before December 30 which will include strict penalties. The government may also put a limit on holding of old notes above which a person will be clamped down up on.

The deadline to deposit old notes is Friday and the ordinance would have to be issued before the scheduled date. The penal provisions, which are yet to be finalised, will involve a fine of a minimum Rs 50,000 or 5 times the amount in question, whichever is higher.

With the government restricting the amount of money that people could deposit without scrutiny or exchange over the counter at banks and post offices after the sudden ban, there were reports of people with undeclared cash burning banned notes, submitting them in temples or simply abandoning them. There was report on old notes floating down the river Ganga.

The government has offered a one-time window for people to deposit their undeclared money in old notes and pay 50 per cent in tax and penalty. If they are caught by the taxman, they will pay almost 90 per cent of the amount they have.