The Union cabinet has cleared an ordinance under which possessing beyond a certain limit and conducting transactions in the banned Rs 500 and Rs 1000 rupee notes will now attract penal provisions and a jail term.
Here are 5 things to know about this latest ordinance by the Modi government
1) According to the ordinance, anyone possessing more than 10 old notes post March 31, 2017 will have to face 4-year jail term and those involved in transactions have to pay a penalty of Rs 5000.
2) Anyone wishing to surrender their old notes once the 50-day deadline gets over on December 30, will have to do so at specified RBI branches after submitting a declaration form. The banks will no longer accept these notes. It is unclear whether any penalty will be levied for deposits beyond December 30.
3) The ordinance called as ‘The Specified Bank Notes Cessation of Liabilities Ordinance’ seeks to extinguish any liability on the government or the RBI arising out of the banned notes post November 8. This is important as a pre-emptive step incase anyone chooses to proceed legally against the government or the RBI for not fulfilling its legal obligation of accepting the notes as valid tender.
4) The ordinance on denotification of Rs 500 and Rs 1000 notes has been sent to President Pranab Mukherjee for his assent.
5) Various reports have pointed out the return of over 90% of the banned notes in the banking system – around Rs 14 lakh crore. While critics of demonetisation point this out as a failure on the part of the government to nail black money hoarders, supporters say that this has resulted in forcing the return of idle and unproductive cash back into organised banking. The tax department is now free to identify those cheating on taxes, resulting in higher tax income for the government.