Finance Ministry on Friday said there is no need to panic and depositing junked ₹ 500 or 1,000 notes of up to ₹ 2.50 lakh in bank accounts will not be reported to the tax department.
It also cautioned people against depositing the money of unknown people in their own accounts or falling prey to cheats, thugs and rumour mongers.
The ministry said, farm income continues to remain tax free and can be easily deposited in bank. Small businessmen, housewives, artisans, workers can also deposit cash in their accounts without any apprehensions, it added.
In its biggest crackdown ever on black money, the government on Tuesday night announced demonetisation of ₹ 500 and ₹ 1,000 notes and asked people holding such notes to deposit in bank accounts.
Since yesterday people have been thronging banks amid concerns among people over exchanging and depositing the scrapped high denomination currency.
People can deposit old ₹ 500 and ₹ 1,000 notes in their accounts till December 30, 2016, without any limit.
Restrictions have been imposed on withdrawal limit and people can withdraw up to ₹ 10,000 per day or ₹ 20,000 per week. This limit will be reviewed after few days.
Besides, old notes up to ₹ 4,000 can be exchanged at any bank or post office till November 24, 2016, by showing photo ID proof.
ATMs can be used to withdraw up to ₹ 2,000 per day per card till November 18 and ₹ 4,000 from Nov 19 onwards.
This limit too will be reviewed subsequently. The ministry also advised people to make payments using cheques, demand drafts, debit or credit cards and electronic fund transfers and there is no restriction on such transactions.