Demonetisation: Big cash deposits get I-T notices

New Delhi: The Income Tax (I-T) department has issued hundreds of notices to those who have deposited huge amounts of Rs 1,000 and Rs 500 notes in banks, even as three  persons died allegedly struggling to exchange the two high-value bills withdrawn by the Centre 11 days ago. One person collapsed and died in Uttar Pradesh’s Hardoi, two others died of heart attack in the state’s Aligarh, the latest in a string of such deaths.

Officials said the I-T department has sent notices to individuals and firms across cities after banks reported cases of “unusual or suspicious volumes of cash deposits” in their accounts, primarily beyond Rs 2.5 lakh. The move is against efforts on “mainstreaming” black money held in the old currencies.

Meanwhile, millions continued to line up before banks and ATMs across states on Saturday, though queues became shorter. Banks remained open but served only their respective customers.

However, senior citizens were exempt and they could go to any bank branch to exchange notes.

The government has announced a raft of measures to ease the crisis but chaos persists after the shock withdrawal of 86% of the currency in circulation in a country where cash is still used in 70% of the expenses. The chaos has allowed the Opposition to attack the BJP-led government at the Centre ahead of key state elections.

The chaos is largely because ATMs are unable to meet a spiraling demand for cash or they are still not equipped to dispense the new bills. A large number of people in rural areas without banking facilities remain the worst hit.  

Opposition parties across states escalated their campaign against the currency swap announced on November 8, saying it has hit consumption, hurt agriculture and real estate, and scores of people have died in queues.

The Supreme Court also warned on Friday that there “may be riots” and refused the government’s plea to stay cases, filed against the demonetisation, in high courts and lower courts, saying ‘how can we shut our doors to people when there is a problem of such a magnitude.”

The government has said the move would hit at corruption and counterfeit currency, besides brining billions of dollars worth of unaccounted wealth into the mainstream economy.

Rs 2,500 is the maximum one can withdraw from a recalibrated ATM a day. Otherwise the cap is Rs 2,000. People can also withdraw cash from select fuel stations of state-owned oil companies. The government has said savings account holders can withdraw up to Rs 24,000 per week and current account holders can withdraw up to Rs 50,000 a week from banks with certain riders.

Old notes are valid till November 24 for key utilities. Exchange limit for old notes is Rs 2,000. The government has also increased withdrawal limits for traders, farmers, and families needing money to bear wedding expenses.