The seizure was made last night, Burhanpur Superintendent of Police Anil Singh Kushwaha said.
"We seized the currency from Shabbir Hussain, a trader based in Malkapur in Buldhana district of Maharashtra, during a screening at the checkpost. The entire cash stock was in the scrapped Rs 1,000 notes," the SP said.
Police have informed Income Tax officials about the seizure and they are carrying out a further probe into it.
Since the by-poll for Nepanagar assembly seat in Burhanpur district is scheduled to be held on November 19, intense checking has been going on based on the directives of the Election Commission, especially in the border areas, the officer said.