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Hi Shahid. No, notes of Rs. 500 and 2000 are not accepted in Bhutan as valid modes of payment. You will have to exchange the currency when you reach Bhutan.
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Indian denomination below 500 are accepted everywhere. You may use ATM at nominal charges to withdraw cash.
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Not sure abt 2000 but they accept 500 bill. u can also get ur currency exchanged on indo-Bhutan border. our Rs 100 will be converted to 108
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Denominations upto 500 are accepted in Bhutan. on bordering towns, like Phuensholing and Samrup Jongkhar, even 2000 notes are sometimes accepted. also, exchange rates are same
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