What is a Cancelled Cheque
A cancelled cheque is a cheque that which the presence of two parallel lines drawn across its layout is an indication that the cheque has been cancelled. You need not sign this type of cheque again. However, you have to make sure that the words ‘cancelled’ are written between these two lines. The term ‘cancelled’ means that the bank will not accept this cheque as payment for getting money. The purpose of cancelling a cheque is to prevent any misuse of it by someone else after it has been issued to you. A cancelled cheque still has information like:
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Your bank account number.
- Account Holder's Name
- IFSC Code
- MICR Code
- Bank Name, Etc.
How do I Write a Cancelled Cheque?
If you want to write a cancelled cheque, here is how you can do it:
- Write “CANCELLED” at the top right corner of the cheque. This will let the receiver know that this cheque has been issued and then cancelled.
- The purpose of writing “CANCELLED” on a cheque is to prevent fraud. By cancelling your cheque, you are making sure that no one else can use it again by covering up all previous signatures and amounts written on it.
When Would You Require a Cancelled Cheque?
Following are the possible areas, where the cancelled cheque would be needed:
- For any financial transaction, like buying or selling a property or paying your utility bills.
- For making payments for goods and services purchased from a store, restaurant or another business establishment.
- A cancelled cheque is legal proof of payment. It is a copy of a cheque that has been cancelled by the issuing bank. A cancelled cheque is required for a variety of reasons, as listed below:
- For KYC completion– In order to complete your KYC (Know Your Customer) formalities, you will be asked to submit some documents as part of the process. One such document that you may need to submit is a cancelled cheque from your bank account. This is because the bank needs to see that the account has sufficient funds to cover the amount being withdrawn, transferred or invested.
- For EPF withdrawal– If you wish to withdraw funds from your EPF account and use them elsewhere, then you will need supporting documents such as a copy of your PAN card and identity proof such as Aadhaar or voter ID card etc. One such supporting document could be a cancelled cheque from your bank account showing that there are sufficient funds available in your account for withdrawals.
- For Demat Account– If you wish to open a dematerialized securities trading account with a stock exchange or any other financial institution then one such document that can be submitted is a copy of the cancelled cheque for the amount being deposited into this new dematerialized
Is Signature Necessary on Cancelled Cheque?
The answer is no, Cancelled cheque does not require a signature because a cancelled cheque cannot be cashed at all. It can only be used as proof of payment and nothing more than that.
This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.
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