I-T cautions people against large cash transactions
03 June 2017
The Income Tax department on Friday reminded people of the ban on cash transactions of Rs2 lakh or more and warned the receiver of such amount will have to cough up an equal amount as penalty.
The Finance Act 2017 bans all cash transactions of Rs2 lakh and above from 1 April 2017.
The newly inserted section 269ST in the Income Tax Act bans cash dealings of Rs2 lakh and above in a single transaction or transactions relating to one event or occasion by an individual on a single day.
"Contravention of Section 269ST would entail levy of 100 per cent penalty on receiver of the amount," the tax department said in a public advertisement in leading dailies.
It also advised people having knowledge of such dealings to tip-off the tax department by sending an email to 'firstname.lastname@example.org'.
Finance minister Arun Jaitley had, in the 2017-18 budget, proposed to ban cash transaction of over Rs3 lakh. This limit was lowered to Rs2 lakh as an amendment to the Finance Bill, which was passed by the Lok Sabha in March.
The restriction, however, does not apply to any transactions involving the government, banking company, post office savings bank or co- operative bank, the tax department said.
The move to ban cash in excess of a threshold in a single transaction is aimed at curbing black money and promoting digital economy.
The government had earlier come out with the Pradhan Mantri Garib Kalyan Yojana (PMGKY), a tax amnesty scheme under which people holding unaccounted cash could come clean by declaring their wealth by paying 50 per cent as tax and penalty and a mandatory deposit of 25 per cent of the amount made in a zero-interest bearing account for four years.