Government notifies The Specified Bank Notes (Cessation of Liabilities) Act, 2017 [Read the Act]

The Central Government has notified The Specified Bank Notes (Cessation of Liabilities) Act, 2017.

The Act aims at formal banning of Rs 500 and Rs 1,000 which had been already scrapped by the Union Government on last November 2016.

The Act also provides for a minimum fine Rs 50,000 for false declaration by persons, who were abroad during the demonetisation period (November 9-December 30, 2016) and given time to deposit the scrapped notes with RBI till March 31.

It will also end the liability of the Reserve Bank of India and the government on the currency notes demonetised in November last year.

A person will be prohibited from holding, transferring or receiving the specified bank notes from December 31, 2016 onwards. It exempts persons from this prohibition if: (i) a person holds up to 10 old notes (irrespective of denomination), (ii) a person holds up to 25 notes for the purposes of study, research or numismatics (collection or study of coins or notes), or (iii) a person holds notes on the direction of a court.  In addition, the RBI or any person authorised by it, are also exempted from this prohibition.

Any person holding the specified bank notes, except in the circumstances mentioned above, will be punishable with a fine: (i) which may extend to Rs 10,000, or (ii) five times the value of notes possessed, whichever is higher.

If a person acting on behalf of a company commits an offence under the Act, the company would also be held liable for such an offence.

Any fine for contravening provisions of the Act will be imposed by the Court of a Magistrate of the First Class or the Court of a Metropolitan Magistrate.

Read the full text of the Act below.

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