Possession of more than 10 junked Rs 500 and Rs 1,000 notes will now attract fine

New Delhi: Holding of more than 10 notes of the junked Rs 500 and Rs 1,000 currency is now illegal, with a new law coming into effect after the President's assent.

The Specified Bank Notes (Cessation of Liabilities) Bill, 2017, received the assent of the President on February 27 and has since then become a law, official sources said.

The Bill, which was passed by Parliament last month, makes holding, transfer and receiving of the old 500 and 1,000 rupee notes a criminal offence. It also ends the liability of the Reserve Bank of India (RBI) and the government on the currency notes demonetised in November last year.

It prohibits holding of "more than 10 notes in total, irrespective of the denomination" after expiry of the 50-day deadline on December 30 for depositing the junked currency in banks or post offices.

However, holding of up to 25 notes is provided for "the purposes of study, research or numismatics".

Violation is "punishable with fine which may extend to Rs 10,000 or five times the amount of the face value of the specified bank notes involved in the contravention, whichever is higher", the Bill states.

Besides ending the liability on old notes, the Bill also allows the Indian citizen, who was outside the country between November 9 and December 30, a three-month grace period to tender the demonetised notes.

This grace period was provided subject to condition that the he or she makes a declaration of being outside India in the 50 days immediately following the November 8 demonetisation decision.

False declaration is punishable with a fine of at least Rs 50,000.

"Whoever knowingly and wilfully makes any declaration or statement... Which is false in material particulars or omits to make a material statement or makes a statement which he does not believe to be true, shall be punishable with fine which may extend to Rs 50,000 or five times the amount of the face value of the specified bank notes tendered, whichever is higher," the Bill stipulates.