Relaxing the norms for higher limit cash transactions, the Central Board of Direct Taxes has allowed the payment of credit card bills over Rs 2 lakh in cash.
The limit will also not be applicable to business correspondents appointed by banks, issuers of prepaid instruments and some loans.
As per the Finance Act of 2017 cash transactions of Rs 2 lakh or above had banned with effect from April 1, 2017 in respect of a single transaction or transactions related to one event or occasion by an individual.
The restriction was another strong measure to curb the menace of black money.Violation of the norms would invite a penalty of 100 per cent of the amount involved on the receiver of cash.
However, the nodal agency to handle direct taxes has notified five carveouts to address genuine difficulties, providing relief to banks and rural borrowers.
Cash payments towards loan repayments shall not be aggregated for the purpose of determining the applicability of this norm.
This would also be mandatory for loan repayments to nonbanking financial companies and housing finance companies. Cash received as part of government awards would remain out of the purview of this norm.
