Today in India, tax evasion had become a common pattern for many people. There are many things that adversely affect the total revenue earned by the government creating difficulty for various welfare programmes which would be set up by them. One of them is especially the huge amount of Domestic Black Money. This also creates meaningless pressure on the genuine taxpayers, because generally the black money is used in cash transactions which involve high value. A very large amount of wealth which is not accounted for is kept and used for the normal transaction in form of cash.
The biggest decision taken by our Prime Minister Mr Narinder Singh Modi of demonetization on 8th November 2016 was only with the main motive, to curb the black money from India’s society. Due to this now the people with a large amount of hoarded black money found that their cash or notes do not have any value and they are as same as the value of paper.
#New Section 269ST- limitations on Cash Transaction.
It is important to point out that Section 269ST was enacted by the government in an effort to curb black money in the economy and tax fraud. Cash payments of Rs.2 lakh and above are prohibited under section 269ST
- A person cannot accept an amount of Rs.2 lakh or more in aggregate from another person on the same day against a single bill or against different bills.
- For transactions related to one event or occasion also, a person cannot accept Rs.2 lakh or more from another person.
But these all transactions are possible with the electronic clearing system and the banking method like Draft, Cheque etc.
This section is not applicable to
- Co-operative Bank
- Banking Companies
- Post Office Saving Bank
- Other Person’s/ Receipts May Be Notified
- It is intended that the transactions that are outlined in section 269SS will not be included in the section 269ST.
Section 269ST Examples
- In a case, a person sold goods of Rs.6,00,000 through the different four bills each bill of Rs.1,50,000 and each to one single person and receives the cash in one single day at a different period of time then this will be a violation of the Section 269ST (a).
- In a case, a person sold goods of Rs. 600,000 on a single bill to the second person and accepts the cash of Rs.3,00,000 on 1st day and then on another day receives cash of Rs.3,00,000, this is also a violation of Section 269ST (b).
- Rajiv gets the order of Food, Decorating Music etc to do the arrangement for the birthday event of Miss. Ruchi. For this he gets the cash of Rs.1,50,000 for the arrangement of Catering and Rs. 200,000 for the decoration and also Rs. 150,000 for music. So as per section 269ST (c), it is a violation of the section even if he had accepted the cash on different dates because the bill drawn here is related to the same event i.e. birthday of Miss. Ruchi.
In all of the 3 above-mentioned cases, Section 269ST is violated and the penalty imposed against it under section 271DA will be applicable.
# Penality for Violation of 269ST
As per section 271DA, if any person violates section 269ST then he has to a 100% penalty. Here 100% means the full amount equal to the amount of transaction transacted or cash received. The above said the penalty will be levied by the Joint Commissioner.
Thus, the government is trying to put more strict provisions on cash transactions to curb black money and to make the Indian economy a world-class economy.
For more clarification of section 269ST – Visit the official circular No.22/2017 dt. 03-07-2017 here