Income Tax Department Warns Against Cash Dealings Above Rs. 2 Lakh

The Income Tax Department on Monday warned people against cash dealings of Rs. 2 lakh and more, saying any violation of this cap will invite strict penalty under law.

In a public message, the department said "accepting Rs. 2 lakh or more in aggregate from a single person in a day for one or more transactions relating to one event or occasion is prohibited".

"Similarly, receiving or repaying Rs. 20,000 or more in cash for transfer of immovable property and paying more than Rs. 10,000 in cash relating to expenditure of business or profession is also banned.

"Cash payment prohibited! Contravention may result in levy of penalty! Go cashless. Go clean," the message stated.

The tax department has also asked the public to report such violations or those pertaining to black money to their jurisdictional principal commissioner of I-T department or email the same to [email protected].

The department, in the past, has issued similar public advertisements.

The central government had banned cash transactions of Rs. 2 lakh or more from April 1, 2017, through the Finance Act 2017.

The newly inserted 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 receiver of the amount," the Income Tax Department had said in a public advertisement in leading dailies early this year.

The restriction, however, is not applicable to any receipt by government, banking company, post office savings bank or co-operative bank, it had said.The move to ban cash transactions above a threshold was aimed at curbing black money by discouraging cash transactions and promoting digital economy.

Such a proposal was also made by the Special Investigation Team (SIT), which was formed to eradicate the scourge of black money, to the Centre last year.