The objective of demonetization as claimed by
Government of India was to curtail the black money
and to stop the use of counterfeit cash to fund illegal
activity and terrorism.
Demonetization is the act of stripping a currency
unit of its status as legal tender.
India is no new to demonetization. Demonetization
has been implemented twice –1946 and 1978 in the past.
On 8 November 2016,The Government of India
announced the demonetization of all Rs.500 and
Rs.1,000 bank notes of Mahatma Gandhi series.
It also announced the issuance of new Rs.500 and
Rs.2,000 bank notes in exchange for the demonetized
All the banned bank notes(99.3%) were returned
to the central bank.
The income tax department seized Rs.474.37 crore
in new and old currency from Nov.9, 2016 to January 4,
2017 (the demonetization period)