Cash transaction limit may be lowered from Rs 3 lakh to Rs 2 lakh, says revenue secretary
The Centre’s Finance Bill, which needs the president’s approval, has proposed penalising violators with fines, Hasmukh Adhia said.
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Revenue Secretary Hasmukh Adhia on Tuesday said the Centre’s Finance Bill has proposed lowering the limit for cash transactions from Rs 3 lakh to Rs 2 lakh. On Twitter, he said the penalty for violating the restriction would be a fine equivalent to the amount. The cap will come into force once the Bill receives the president’s assent, which is expected to happen on Wednesday, mint reported.
On February 5, Adhia had said businesses or vendors accepting cash in excess of Rs 3 lakh will have to pay a 100% penalty starting April 1. “Supposing you conduct 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,” he had explained. The restrictions were not applicable to government banks, post office savings banks or co-operative banks, he had said.
In the 2017-18 Budget, Finance Minister Arun Jaitley had proposed inserting Section 269ST in the Income Tax Act, seeking to bar individuals from receiving more than Rs 3 lakh in cash in a day. The move to limit cash transactions in India began after Prime Minister Narendra Modi announced the demonetisation drive on November 8 last year.
1/2 In the official amend.to FBill Govt has proposed that limit of 3 lakhs for cash tranx,beyond which it is illegal, be reduced to 2 lakhs
— Dr Hasmukh Adhia (@adhia03) March 21, 2017
2/2 The penalty for violating this is a fine equivalent to the amount of transaction
— Dr Hasmukh Adhia (@adhia03) March 21, 2017