Ways to exchange/deposit of your Rs.500 & Rs.1000 old notes

The facility for exchange/deposit of SBNs stands closed with effect from December 31, 2016. But,

A) In terms of the GoIOrdinance No. 10 of 2016 dated December 30, 2016 on “The Specified Bank Notes (Cessation of Liabilities), a facility for exchange of SBNs (old Bank Notes in the denominations of ₹500 and ₹1000) is made available for the resident and non-resident Indian citizens (Indian passport required) who could not avail the facility from November 10 to December 30, 2016 on account of their absence from India during the aforementioned period.

The Exchange facility will remain open for

• Residents of India from January 2, 2017 to March 31, 2017

• NRIs from January 2, 2017 to June 30, 2017 at five Reserve Bank offices at Mumbai, New Delhi, Chennai, Kolkata, and Nagpur & a grace period has been provided (“grace period” means the period to be specified by the Central Government, by notification, during which the specified bank notes can be deposited in accordance with this Ordinance).

Counter Timings for Exchange of SBNs during Grace Period
Regional Office	Counter Timings for Exchange of SBNs	Days
Mumbai	10.30 am to 3.00 pm	Monday to Friday
New Delhi	10.00 am to 2.30 pm	Monday to Friday
Kolkata	10.00 AM to 2.30 PM	Monday to Friday
Chennai	10.00 am to 2.30 pm	Monday to Friday
Nagpur	10:15 am to 2:45 pm	Monday to Friday

N.B. - The facility can be availed only in individual capacity and only on one occasion during the period. No third party tender is permissible under the facility. This facility will not be available for Indian citizens resident in Nepal, Bhutan, Pakistan and Bangladesh.

The details of the facility including terms/ conditions and modalities thereof are available in RBI circular DCM (Plg) No 2170/10.27.00/2016-17 dated December 31, 2016.

Link to tender form for ResidentIndians and NRIs (holding Indian passport) available here.

After the expiry of grace period, holding of not more than 10 notes in total, irrespective of denomination or not more than 25 notes for the purpose of study/ research/ numismatics is permitted. In terms of Section 7, contravention of Section 5 shall be punishable with fine which may extend upto 10,000 INR or five times the face value of the SBNs involved in the contravention, whichever is higher.

B) Taxation Laws (Second Amendment) Act, 2016 and Pradhan Mantri Garib Kalyan Deposit Scheme, 2016.

1. The Taxation Laws (Second Amendment) Act, 2016 has been enacted by Parliament on 15.12.2016. The said Act has inter alia amended the provisions of Finance Act, 2016 and inserted a new Chapter on, ‘The Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016 (here in after ‘the Scheme’) in the Finance Act, 2016.

2. The Scheme provides an opportunity to persons having undisclosed income in the form of cash or deposit in an account maintained with a specified entity (which includes banks, post office etc.) to declare such income and pay tax, surcharge and penalty totaling in all to 49.9 per cent. of such declared income. Besides, the Scheme provides that a mandatory deposit of not less than 25% of such income shall be made in the Pradhan Mantri Garib Kalyan Deposit Scheme, 2016(hereinafter ‘the PMGKY Deposit Scheme’) which has separately been notified by the Department of Economic Affairs. The Scheme has commenced on 17.12.2016 and shall remain open for declarations/deposit upto 31.03.2017.

Scope of the Scheme:

3. A declaration under the aforesaid Scheme may be made in respect of any income in the form of cash or deposit in an account maintained by the person with a specified entity, chargeable to tax under the Income-tax Act for any assessment year commencing on or before the 1st day of April, 2017. No deduction in respect of any expenditure or allowance 2 or set-off of any loss shall be allowed against the income in respect of which a valid declaration is made under the Scheme.

Tax, surcharge, penalty & deposit under the Scheme:

4. The person making a declaration under the Scheme would be liable to pay tax at the rate of thirty per cent. of the undisclosed income as increased by surcharge to be called the Pradhan Mantri Garib Kalyan Cess calculated at the rate of thirty-three per cent. of such tax. In addition, penalty at the rate of ten per cent. of the undisclosed income shall be payable.

The declarant shall also be required to deposit an amount not less than twenty-five per cent. of the undisclosed income in the PMGKY Deposit Scheme. The deposit shall bear no interest and the amount deposited shall have a lock-in period of four years.

Time limits for declaration and making payment:

5. A declaration under the Scheme can be made anytime on or after 17th December, 2016 but on or before 31st March, 2017. The tax, surcharge and penalty payable under the Scheme and deposit to be made in the Deposit Scheme, shall be paid/made before filing of declaration under the Scheme. The declaration shall be accompanied with proof of payment made in respect of tax, surcharge and penalty payable under the Scheme and proof of deposit made in the PMGKY Deposit Scheme.

Further information is available on our website (www.rbi.org.in) and the website of the Government of India (www.finmin.nic.in)