Income Tax

5 Methods for NRIs to get their Old Demonetized Currency Exchanged

Demonetization of Rs. 500 and Rs. 1,000 currency notes has not only taken the Indian citizens by surprise but also created quite a situation for the Non Resident Indians (NRIs) living overseas. The effect of cancellation of high value notes has been felt across the borders with huge population of India living in countries like the US, Canada, UK and Dubai, among others as they suddenly found themselves holding worthless Indian currency.

However they have nothing to worry and they can get their old demonetized currency exchanged through ay of these 5 Methods

5 Methods for NRIs to exchange the demonetized Notes
5 Methods for NRIs to exchange the demonetized Notes

Does that mean that the bills have become worthless overnight? Not really. Here are 5 methods to reclaim their worth:

  1. Travel to India before December 30, 2016: Since the foreign branches of Indian banks, both public and private sector, are not accepting cash outside the country, NRIs can personally exchange the notes in India. If you are travelling to the country any time before the 30th December deadline, you can exchange the notes with any of the banks.
  1. Travel to India after December 30, 2016: If you are travelling to the country between 02 January and 31 March, you can visit any of the specified offices of the RBI along with the required documentation and exchange the notes.
  1. Deposit in NRO Account: According to the RBI guidelines, if you are an NRI and hold an NRO account, you can deposit these banknotes into the account conveniently. You can visit the branch of the said bank anywhere in the world and deposit the same in the NRO account.
  1. Authorize another person to deposit: The RBI in its Frequently Asked Questions (FAQs) has said that NRIs who have bank notes in India can authorize, in writing, another person to deposit money into the bank account.The authorized person has to come to the bank branch with the notes, the authority letter given by you and a valid identity proof to deposit the money on your behalf.
  1. Send money through someone to India: If the money is with you abroad and you are unable to travel to India in the coming six weeks, you can send the money across to India through someone trustworthy and authorize them to deposit it on your behalf.
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All cash deposits of more than Rs. 2.5 lakh to a bank account until 30th¬†December will be reported to the tax department by banks. It will then be matched with the depositor’s income tax returns and suitable action taken. If you can explain the source of cash, then there will be no tax and penalty.

Filing of Income Tax return Mandatory for NRI if currency deposited exceeds Rs 2.50 lacs- Also, filing an income tax return in India becomes mandatory for an NRI if the sum total of his taxable income from all sources (before claiming any deduction) exceeds the basic exemption limit of Rs. 2.5 lakh.

The government will also make provisions for the exchange of these currencies in countries like Nepal, where Indian currencies are legal tender. However, this will take time as some of these places are suspected hot-spots for fake currency entering the country and any exchanges happening in these places need to be monitored carefully.

The ways are many but with stringent measures and policies being announced almost daily, it is becoming difficult for people whether residents or non-residents to keep their black money or old currency notes hidden from the IT Department or for that matter any other governing bodies.

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