How can NRIs Exchange or deposit banned Old 500 and 1000 Notes due to Demonetization
After the historic decision of Hon’ble PM of India, Shri Narendra Modi to discontinue the 500 and 1,000 rupee notes from the midnight of 8th Nov. 2016, there have been quite a drift in the country. Long queues outside the ATMs and banks are a usual view these days. In this context, the question is how the NRIs or the Indians staying in abroad countries will exchange their money and safeguard their finances. This is a very crucial time where the Govt. has given the window of up to 30th December 2016 to change the old notes with the newer ones, or to deposit them in the bank accounts. The foreign branches of the nationalized banks are not in the mood to accept and exchange the old scrapped notes. Those notes can only be exchanged in India.
How will NRIs exchange their old notes?
- Either to deposit their old currency notes of Rs. 500 or Rs. 1,000, they will have to bring those currencies to India. It is impossible to exchange or deposit them from foreign soil.
- They can either come to India personally or can authorize someone on their behalf so that the old currency notes can be exchanged with the new notes. The authorized person should carry the identity proof and authorization letter.
- There is no limit of deposit of cash in the account. But there is per day exchange limit of Rs. 4,500 and per week withdrawal limit of Rs. 24,000.
- Either the NRIs can visit their banks or can go to the RBI for cash deposit and cash exchange.
- They can also use the e-corner facilities which have cash deposit machines if their bank supports it.
- Even if the NRIs come to the country after 30th December, they can still exchange their old notes from RBI. The time window for such exchanges from RBI is 2nd January, 2017 to 31st March, 2017.
|Sl. No.||Attributes||Related information|
|1||Accounts held by NRIs||NRO accounts in India|
|2||Starting date of demonetization||Midnight of 8th November, 2016.|
|3||Time for exchange of old currency in the banks||Till 30th December, 2016|
|4||Time for exchange of old currency in the RBI offices||Till 31st March, 2017|
|5||Maximum cash deposit for exemption of tax||Rs. 2.5 lakh|
|6||Daily cash exchange limit||Rs. 4,500|
Tax on cash deposits
All banks are directed to inform the Tax Dept. on deposits of more than Rs. 2.5 lakh in a single account. There is no separate taxation rule for the NRO accounts that means they will have to follow the same regulations. If the cash deposits within 30th December exceed Rs. 2.5 lakh, then necessary scrutiny will be done from the income tax officials.
For those travelling outside at present
Those who are outside the country for travelling or other purposes will have to return India so that they can exchange their old notes with new ones or deposit them in their accounts. They cannot do so from foreign soil. They can use credit/debit cards or other wallet payment methods as of now. Traveler cheques are also acceptable in many places. There are people residing in Nepal, Bhutan, etc. along the borders of India where Indian currency is in use. The Govt. is expected to make some provisions to exchange those currencies too.