Denomination of a country's currency that, by law, must be accepted as a medium for commercial exchange and payment for a money debt. While usually all denominations of the circulating paper money are legal tenders, the denomination and amount in coins acceptable as legal tender varies from country to country. Checks and postal orders are not legal tenders and are accepted only at the option of the creditor, lender, or seller. Also called lawful money.
Legal tender is a medium of payment recognized by a legal system to be valid for meeting a financial obligation. Paper currency and coins are common forms of legal tender in many countries. Legal tender is variously defined in different jurisdictions.personal cheques, credit cards, and similar non-cash methods of payment are not usually legal tender. The Indian rupee is the de facto legal tender currency in India. The Indian rupee is also legal tender in Nepal and Bhutan, but the Nepalese rupee and Bhutanese ngultrum are not legal tender in India. The Indian rupee used to be an official currency of other countries, including the Straits Settlements (now Singapore and parts of Malaysia), Kuwait, Bahrain, Qatar, and the Trucial States (now the UAE).
On November 8, 2016, Prime Minister Narendra Modi announced that existing INR 500 and INR 1000 banknotes would no longer be accepted as legal tender, with a view to curb counterfeiting, tax evasion, and the parallel economy, and outlined a scheme for holders of such banknotes to either deposit them into their bank accounts for full, unlimited value, or to exchange the banknotes for new INR 500 and INR 2000 banknotes,