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Ravi (Consultant)     10 November 2016

Old currency of a nri

One of my Friend NRI invested in cash with various firms and people; for last 2 years; all paid in cash. and he has cash with him now but worth nothing after devaluation of 500/1000 Rs.

Can he deposit it in Bank showing source of the money, his NRI Account.?

What is 200% penalty as came in news Paper ? is there any criminal prosecution for keeping currency at home ?


 8 Replies

200 % penalty on deposit mismatch over Rs 4.5 lakh:� Further dangling the stick, government tonight warned that cash deposits above Rs 2.5 lakh threshold under the 50-day window could attract tax plus a 200 per cent penalty in case of income mismatch.� "We would be getting reports of all cash deposited during the period of November 10 to December 30, 2016, above a threshold of Rs 4.5 lakh in every account. "The (tax) department would do matching of this with income returns filed by the depositors. And suitable action may follow," Revenue Secretary Hashmukh Adhia said �on Wednesday night. Any mismatch with income declared by the account holder will be treated as a case of tax evasion.� "This would be treated as a case of tax evasion and the tax amount plus a penalty of 200 per cent of the tax payable would be levied as per the Section 270(A) of the Income Tax Act," he said. The government has allowed citizens to deposit in their bank accounts old currency of Rs 500 and Rs 1,000 denominations, which had been declared invalid in the nation's biggest crackdown on blackmoney, corruption and counterfeit notes, between November 10 and December 30.
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G.L.N. Prasad (Retired employee.)     11 November 2016

If there is proper accounting of the money, there can be no reason  for concern.

Do not be mislead by rumors.  Contact a good Chartered Accountant and there is no problem and every thing will be absolutely alright if the money is properly accounted.

1 Like

Ravi (Consultant)     11 November 2016

He kept money at home, is it comes under tax evasion ? its not black money, its withdrawn from his NRI account; he didnt deposited in Bank because bank was asking PAN card and someone said if he deposit it in bank he has to pay TAX and show the source of Money.

Vinod shah (legal assistance for victims of system. findjobs02@gmail.com)     11 November 2016

Taxation problems will be for big money. For few lacs there will no problem if source can be explained.

GANDHI MOHAN BHARATI (Pensioner)     11 November 2016


How come your friend does not have PAN ? If he does not have PAN then even depositing in Bank will be difficult.

You ar yourself a consultant. You must be aware of the implications.

Let him apply for PAN and deposit in Bank and if asked for details by the IT Department, he should be able to explain the source.


SIVARAMAPRASAD KAPPAGANTU (Retired Manager)     11 November 2016

I agree with Shri Gandhi Mohan Bharati and you may follow the advice.  But, the amount is to be credited to NRO account of the NRI.

Ravi (Consultant)     11 November 2016

He is a NRI and he dont have any Income in india he said; most of the time is Abroad.

He mailed me and said he has some cash at home.

is it compulsory for a NRI to have PAN card ? in india half of the population dont have Bank Account.


GANDHI MOHAN BHARATI (Pensioner)     12 November 2016

When you need to deal in Indian Currency, it is better to have PAN.

If he does not have PAN, depending upon the type of A/c he has in a bank or any other income will be taxed at 20% and he will not be able to file a ITR or get any refund.

NRIs will eventually return and become Residents. Why delay having a PAN ?

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