NEW DELHI: Holding old notes will be treated as a crime and the person found having in excess of 10 old notes will be liable for punishment as the Cabinet on Wednesday approved an ordinance to impose penalties on anyone possessing the demonetised Rs 500 and Rs 1,000 notes.
The penalty for holding old currency in excess of 10 notes may include financial fines and a jail term of up to 4 years in certain cases. Official said that the Narendra Modi government wants to send put a clear message to the black money holders so that nobody could conceal the old notes and more black money could come out.
The ordinance was cleared by the cabinet chaired by the PM and will be sent to the President for his approval. Centre had banned Rs 500 and 1,000 notes on November 8 in a sudden anti-corruption move against black money. Old notes can be deposited in banks till Friday, December 30. After that, only people who could not deposit their banned notes because of exceptional circumstances can do so, that too at the RBI or Reserve Bank of India.
There may be a fine of at least 50,000 rupees or five times the amount caught -- whichever is higher. A magistrate will hear cases involving violation and decide on the punishment.
The ordinance, named as 'The Specified Bank Notes Cessation of Liabilities Ordinance', is to extinguish liability of government and RBI on the demonetised high-denomination notes.
The government's move took out 86 per cent of the money in circulation. According to the RBI, more than 13 lakh crores in old notes has already returned to the system as deposits.
People with undeclared money in old notes still have a one-time window to deposit their undeclared money in banned notes and pay 50 per cent in tax and penalty.
Officials said that fresh guidelines would be issued for exchange of notes at RBI counters post December 30. Notes will be allowed to be deposited with select branches of RBI till March 31 in exceptional circumstances.