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Section - 269ST - Restriction on cash transactions-

 

This is a new section proposed to be inserted with the object of discouraging the cash transactions which are responsible for creation and circulation of black money.

 

The section proposes to provide that no person shall receive an amount of Rs.3 lakhs or more in aggregate from a person in a day; or in respect of a single transaction; or in respect of transactions relating to one event or occasion from a person in cash. The payment exceeding Rs.3 lakhs as above can be accepted only by account payee cheque or account payee bank draft or use of electronic clearing system through a banking system.

 

The restriction shall not apply to Government, any banking company, post office saving bank or co-operative bank. Central Government has also been empowered to notify the persons or class of persons or receipts on whom the restriction shall not apply. Transactions referred to in section 269SS are also excluded from this restriction.

 

Violation of the provision will invite penalty under section 271DA, a newly inserted provision, of an amount equal to the amount of such receipt. Penalty shall not be levied if the person proves that there were good and sufficient reasons  for the violation. The penalty shall be levied by the Joint Commissioner.

 

As a consequence section 206C is proposed to be amended to omit the provision relating to tax collection at source at the rate of 1% of consideration on cash sale of jewellery exceeding Rs.5 lakhs.

The amendment will be effective from 1st April 2017


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