Revenue Secretary Hasmukh Adhia on Sunday said businesses or vendors accepting cash in excess of Rs 3 lakh will have to pay a 100% penalty starting April 1. Adhia made the announcement during an interview with PTI.
“Supposing you do a transaction of Rs 4 lakh in cash, then the penalty will be Rs 4 lakh. If you do a transaction of Rs 50 lakh, the penalty will be Rs 50 lakh,” Adhia said. However, these restrictions will not apply to the government, post office savings bank or co-operative bank, he added. The government will track all such large cash transactions, Adhia said, adding that the previous notification of showing a PAN card for any transaction above Rs 2 lakh stays.
In his Budget 2017-18, Finance Minister Arun Jaitley had proposed to insert Section 269ST in the Income Tax Act seeking to ban any person from receiving RS 3 lakh in cash in a day.
On November 8, Prime Minister Narendra Modi had announced that Rs 500 and Rs 1,000 currency notes will no longer be a legal tender. The country faced a severe cash crunch as a result. A panel of chief ministers, which was constituted by the Centre to prepare a roadmap to promote digital transaction in the country, had recommended a cap on cash transactions beyond a threshold and a tax on payments of over ₹50,000. The 13-member Committee of Chief Ministers, headed by Andhra Pradesh Chief Minister Chandrababu Naidu, had submitted its interim report in this regard just days before the Union Budget was presented.
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