Section - 269ST - Restriction on cash
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
The amendment will be effective
from 1st April 2017