Section 269ST ( Restriction on Cash Transaction ) August 31, 2017
In this article we elaborate section 269ST
of IT Act, in respect of Cash Transaction provisions applicable from
01-Apr-2017 on wards with examples.
Point No. 1. From which date this section is applicable?
This section applies from 01/04/2017
(F.Y.2017-18 onwards)
Point No. 2. What are the provisions of Section 269ST?
Finance Bill 2017 proposed to insert section 269ST in
the Income Tax Act to provide that no person shall receive an amount of Two
lakh rupees or more,—
(a) in aggregate from a
person in a day;
E.g. if a person receives Rs.2.25 lakhs in
cash for 2 different bills of Rs.1 lakh and 1.25 lakh, then also penalty is
levied.
(b) in respect of a
single transaction; or
E.g. if there is single bill of Rs.3.10
Lakh and cash is received on different days of Rs.1.6 lakh and Rs.1.5 lakh,
then also penalty is levied.
(c) in respect of
transactions relating to one event or occasion from a person,
E.g. if marriage is one occasion and a
person receives amount of Rs.3,00,000/-. Thus penalty is levied of 100% of
amount received.
other-wise than by an account payee cheque
or account payee bank draft or use of electronic clearing system through a bank
account.
(d) withdrawal of
amount from own bank account
E.g. if a person withdraws in a day amount
of Rs.2 lakhs or above, then penalty is levied.
Point No. 3. To whom does Section 269 ST applies?
To any person receiving cash above Rs.2
lakh.
Point No. 4. For which transactions is Section 269ST not
applicable?
Restriction on cash receipt of Rs.2 Lakh or
more w.e.f 01.04.2017 shall not apply to
– Government, any banking company, post office savings bank or co-operative
bank.
– Transactions of the nature referred to in section 269SS;
– Such other persons or class of persons or receipts, as may be specified by
the Central Government by notification in the Official Gazette.
Point No. 5. Whether penalty is applicable for regular
receipts only?
Any type of amount of Rs.2 Lakh or above
received in cash whether capital or revenue in nature.
Point No. 6. Whether exempt income is covered under
Section 269ST?
Both taxable and exempt incomes are covered
in Section 269ST.
Point No. 7. If the amount is received for personal purpose,
whether 269ST is applicable?
Irrespective of purpose of accepting amount
i.e., whether business purpose or personal purpose or as a trustee, custodian
etc. section 269ST is applicable.
Point No. 8. What is the Penalty for Contravention of Section
269ST?
100% penalty on receiver of amount.