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Income Tax Department warns penalty of 100% against cash transactions of 2 lakh or more

Income Tax Department warns penalty of 100% against cash transactions of 2 lakh or more

New Delhi: Following the insertion of section 269ST with effective from April 1, the IT department this Friday has warned public of a 100 percent penalty against the violators.

The Department had earlier made it clear in an advertisement in leading daily papers “Cash transaction of Rs 2 lakh or more is prohibited with effect from April 1. Contravention of Section 269ST (of the Income Tax Act of 1961) will entail a levy of 100 per cent penalty on the receiver of the amount”.

Section 269ST restricts cash transaction of 2 lakh or more by a person in a single day in a day in respect of a single transaction or in respect of transactions relating to one event or occasion from a person, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account.

Finance Minister in the 2017-2018 Budget, proposed to ban cash transaction of amount more than 3 lakhs. But after an amendment in the Finance Bill, the amount was lowered down to 2 lakh rupees which were later passed by the Lokh Sabha in March.

The department said that this restriction is not applicable to any receipt by the government, banking company, post office savings bank or co-operative bank.

The government did come out with a tax amnesty scheme PMGKY(Pradhan Mantri Garib Kalyan Yojana) which would allow people to turn their unaccounted cash into legal with paying 50 per cent as tax and penalty, Hans reported.