Demonetisation ordinance explained in seven points: Here's how it will impact you

In a bid to discourage holding of old denomination currencies beyond 31 March, 2017, the Cabinet headed by Prime Minister Narendra Modi on Wednesday approved promulgation of an ordinance to impose a penalty, including a jail term, for possession of the scrapped 500 and 1,000 rupee notes beyond a cut-off. Any currency note issued by the government is legal tender and the RBI has a legal obligation to make payment for the amount stated on the note. However, the ordinance does away with that legal obligation on the part of the Reserve Bank of India (RBI). [caption id=“attachment_3140018” align=“alignleft” width=“380”]  Representational image. Reuters[/caption] 1) If you possess banned notes in Rs 500 and Rs 1000 denominations, you can only exchange it at select branches of the Reserve Bank of India. 2) If you hold over 10 notes of the banned currency after 31 March, 2017, you could be fined Rs 5,000 or worse, sent to jail for four years. If you transact in these notes, you could likely attract a penalty of Rs 5,000. 3) If you possess banned notes in denominations of Rs 500 and Rs 1000 beyond March 31, 2017, you could be fined amounts in multiples ranging from Rs 5,000 to Rs 50,000. You also have to give a declaration stating why you could not submit the money in the stipulated time frame until 30 December, 2017. 4) Just in case you cannot go physically to an RBI branch to deposit the banned notes, you can still do it by sending the money through insured post. You still will have to provide the aforementioned declaration on why you could not deposit the money. 5) If you have kept banned notes in hand for souvenirs, you can keep up to 10 notes and for numismatics upto 25. 6) Any citizen who is outside the country may authorise in writing enabling another person in India to deposit the notes into a bank account. The person so authorized has to come to the bank branch with the specified bank notes, the authority letter and a valid identity proof 7) Any payment towards tax, surcharge, penalty and deposit under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) can be made in old bank notes of Rs 500 and Rs 1000. However, this can be done only until December 30. The PMGKY which began on 17 December, is open for declarations till 31 March, 2017