NEW DELHI, Apr 5:
Government today again clarified that no person shall receive an amount of Rs two lakh or more in an aggregate from a person in a day, in respect of a single transaction or in respect of transactions relating to one event or occasion from a person. If he or she does so, they have to pay a penalty of a sum equal to the amount of such receipt.
According to a statement issued by the Finance Ministry, the Government has taken these steps through the Finance Act, 2017 to curb black money by discouraging cash transaction and by promoting digital economy. It includes placing restriction on cash transaction by introduction of New Sections 269ST & 271DA to the Income-tax Act. It has been provided that no person shall receive an amount of Rs 2 lakh or more, in aggregate from a person 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.
Any contravention to the said provision shall attract penalty of a sum equal to the amount of such receipt. However, the said restriction is not applicable to any receipt by Government, banking company, post office savings bank or co-operative bank.
It has also been decided that the restriction on cash transaction shall not apply to withdrawal of cash from a bank, co-operative bank or a post office savings bank. Necessary notification in this regard is being issued.
It has also been provided that any capital expenditure in cash exceeding Rs 10,000 shall not be eligible for claiming depreciation allowance or investment-linked deduction. Similarly, the limit on revenue expenditure in cash has been reduced from Rs 20,000 to Rs 10,000.
In order to promote digital payments in case of small unorganized businesses, the rate of presumptive taxation has been reduced from 8 per cent to 6 per cent for the amount of turnover realised through cheque/digital mode. Restriction on receipt of cash donation up to Rs 2,000 has been provided on political parties for availing exemption from Income Tax.
Further, it has also mandated that any donation in cash exceeding Rs 2000 to a charitable institution shall not be allowed as a deduction under the Income-tax Act. (UNI)
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