No Harassment For Small Deposits, Says Arun Jaitley After Big Currency Ban

New Delhi: As millions across India today scrambled to deposit and exchange in banks their Rs 500 and Rs 1,000 notes, banned in a surprise move by the government, Finance Minister Arun Jaitley said nobody would be harassed over small deposits.

"Nobody will face questions or harassment for small deposits," Mr Jaitley told reporters at an Economic Editors' conference.

"It is only those with large amounts of undisclosed money who will have to face the consequences under existing laws," the minister asserted.

Deposits above Rs. 2.5 lakh will be taxed and could draw a 200 per cent penalty if found disproportionately higher than the account owner's income, the government has said.

Banks have been asked to keep details of people depositing large amounts over the 50-day window till December.

People buying jewellery will also be tracked. Jewellers have been ordered to keep the details of such buyers and if they don't, they will be punished.

Mr Jaitley said people might face problems initially, but they would definitely benefit from the scrapping of large currency notes to end corruption, unaccounted wealth and terror financing.

Prime Minister Narendra Modi's announcement of the ban late on Tuesday night left people across the country rushing to ATMs and many complained that despite the government's order, Rs 500 and Rs 1,000 notes were being rejected at petrol stations and toll booths.

Responding to allegations by critics of the move like Bengal Chief Minister Mamata Banerjee - that the sudden move will cause immense hardship to the poor - Mr Jaitley said: "Temporary hardship is no excuse to perpetuate a system where black money prospers."