The currency in Uttarakhand as well as the rest of India is the Indian Rupee (Re. or Rs.). One Indian rupee is equal to 100 paise. The rupee notes come in the denominations of Rs 1000, 500, 100, 50, 20, 10 and 5. You will rarely find one rupee or two rupees notes.
There are coins of 1, 2 and even 5 Rupees. For the purpose of travel, it is advisable to carry money in small denominations. This will certainly help you while tipping, buying bus tickets and paying for small knick-knacks.
Other mediums of exchange in Uttarakhand are traveler's checks, credit cards, etc. All the major hotels, restaurants, showrooms, etc in all the big cities of Uttarakhand accept these. However, you will have to keep cash while visiting small cities and towns of the state. Exchanging money in Uttarakhand is not a major problem. There are a number of banks as well as other money exchangers in the big cities of the state, like HDFC bank, ICICI Bank, etc.