Income Tax Department has warned people against initiating cash transaction worth Rs 2 lakh or more, directing that the receiver of the amount will have to spend an equal amount of money as penalty.
People are also directed to flag off such issues to the IT department by sending an email to ‘email@example.com’.
The central government has banned cash transactions of Rs 2 lakh or more from April 1, 2017, through the Finance Act 2017.
The newly included section 269ST in the Income Tax Act bans such cash dealings on a single day, in respect of a single transaction or transactions relating to one event or occasion from an individual.
“Contravention of Section 269ST would entail levy of 100 per cent penalty on the receiver of the amount,” the tax department said in a public advertisement in leading newspapers.
In the 2017-18 budget, Finance Minister Arun Jaitley had proposed to put a ban on cash transaction of over Rs 3 lakh. This limit was lowered to Rs 2 lakh as an amendment to the Finance Bill, which was passed by the Lok Sabha in March.
“The restriction is not applicable to any receipt by the government, banking company, post office savings bank or co- operative bank,” the tax department said.
The move to ban cash transaction above a mentioned limit was aimed to put a curb on black money by discouraging cash transaction and promoting digital economy.