Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi, 5th April, 2017.

PRESS RELEASE

Budget 2017 takes Steps to discourage Cash transactions & curb Black Money

Various legislative steps have been taken by the Finance Act, 2017 to curb black money by discouraging cash transaction and by promoting digital economy.

These prominently include placing restriction on cash transaction by introduction of new sections 269ST & 271DA to the Income-tax Act. It has been provided that no person (other than those specified therein) shall receive an amount of two lakh rupees or more,

(a)  in aggregate from a person in a day;

(b)  in respect of a single transaction; or

(c) 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, co­operative 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 rupees ten thousand 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% to 6% for the amount of turnover realised through cheque/digital mode.

Restriction on receipt of cash donation up to Rs. 2000 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.

(Meenakshi J. Goswami)
Commissioner of Income Tax

(Media & Technical Policy)
Official Spokesperson, CBDT.

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Category : Income Tax (24907)
Type : Featured (4135) News (12467) Trending (230)
Tags : Budget (1473) Budget 2017 (351) Section 269ST (21) Section 271DA (4)

8 responses to “Cash withdrawals from bank do not attract Section 269ST Penalty”

  1. nithul says:

    certain clarifications regarding our business we are wholesale dealers in garlic we sell goods on commission basis it is we take commission from our buyers we are in Bangalore APMC it is agriculture basically it is small vendors and local markets who buy from us it is all in cash and credit we get all the payments in cash what are the expenditures we can claim from our consignee can I collect godown storage facility a small sum for the service rendered or brokerage for selling goods what all the taxes should we deduct from these amount receivable

  2. Prasanna says:

    Cash withdrawal​ doesn’t attracts, but later notice will be delivered on dashboard in income tax website to reply how the amount has been utilized ,😀😀

  3. Madhusudan says:

    Is payment in respect of life insurance premium also covered in limit of 10000.00 plz reply

  4. L.A.Bangera says:

    Exactly. Why should a person who wishes to make digital payment should end up in paying more by way of service charges, etc. This is certainly a hitch in promoting digitalization.

  5. Ashok Kumar says:

    This is just not possible. Rate of tax has already been reduced from 8% to 6% on digital payments received by business houses.

    • Vijay Paikoti says:

      Rate of Tax has not been reduced to 6% Sir. There is something called presumptive taxation on businesses whose yearly turnover is less than Rs. 2 crores wherein they have to declare a minimum of 8% on such turnover as net profit offered to income tax. This minimum has been reduced to 6% in cases these businesses whose yearly turnover is below Rs. 2 crores accept the payments in digital modes. i. e. they can show a profit of 6% for digital payments received instead of 8% if they receive cash payments

  6. Rajendranath Bharati says:

    What registers and records are to be maintained under GST by service provider.

  7. Bharati says:

    In order to promote digitalization, all the charges for swiping cards (debit /credit) for purchase of commodities should be waived off, which we have to pay now in the for of vat/ s.t/ etc…

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