Supposing you do a transaction of ₹4 lakh in cash, then the penalty would be ₹4 lakh. If you do a transaction of ₹50 lakh, penalty would be ₹50 lakh” Revenue Secretary Hasmukh Adhia says
Delhi: In an attempt to check generation of black money, a steep penalty awaits those accepting cash in excess of ₹3 lakh, starting from April 1, to settle any cash transaction.
A ban on cash transaction of more than ₹3 lakh has been projected in the Budget for 2017-18.
In an interview to PTI, Revenue Secretary Hasmukh Adhia stated the penalty for doing cash transaction will be sharp and the receiver will have to pay penalty an amount equivalent to the cash received.
Supposing you do a transaction of ₹4 lakh in cash, then the penalty would be ₹4 lakh. If you do a transaction of ₹50 lakh, penalty would be ₹50 lakh,” he stated, adding that the penalty will be imposed on the receiver.
So, if someone buys an expensive watch for cash, it is the shopkeeper who will have to pay the tax, he stated, adding that the provision is to prevent people from doing large cash transactions.
Demonetisation brought to account the stock of black money and now the government wants to end future generation of the same.
The government, he stated, will track all large cash transactions, and also curb the ways of noticeable consumption through cash.
People with large sum of unaccounted money generally spend it on holidaying or buying luxury items like cars, watches and jewellery. The new cash restrictions will mean that such spending avenues are condensed, disincentivising people from generating black money.
Mr. Hasmukh Adhia stated that the earlier notified rule of quoting PAN for any cash transaction above ₹2 lakh stays.
Finance Minister Arun Jaitley had in his Budget for 2017-18 proposed to insert Section 269ST in the Income-Tax Act to state that “no person shall receive an amount of ₹3 lakh or more by way of cash in total 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.”
Though, the restrictions will not apply to the government, any banking organization, post office savings bank or co-operative bank.
Mr. Adhia stated the Budget proposes to impose penalty on a person who receives ₹3 lakh and above.
A panel of Chief Ministers headed by AP Chief Minister Chandrababu Naidu had in its interim report just days before the Budget recommended a limit on cash transactions beyond a threshold and a tax on payments of over ₹50,000 as a way of discouraging people from using physical currency.