Killing Cash: Transactions In Cash Over Rs 3 Lakh Will Attract 100 Per Cent Penalty

Starting 1 April 2017, anyone who receives cash in excess of Rs 3 lakh as part of any transaction will have to pay a penalty of equal amount, Revenue Secretary Hasmukh Adhia said in an interview with the Press Trust of India on Sunday.

“Supposing you do a transaction of Rs 4 lakh in cash, then the penalty would be Rs 4 lakh. If you do a transaction of Rs 50 lakh, penalty would be Rs 50 lakh,” Adhia has said.

The step, according to the revenue secretary, has been taken to discourage large cash transactions. Adhia said that demonetisation has unearthed black money and the government is now taking steps to prevent the generation of the same. Prime Minister Narendra Modi has repeatedly said that his government will take all necessary steps to control the generation of black money.

Section 269ST in the Income-Tax Act, introduced by Finance Minister Arun Jaitley in his Budget speech, states that "no person shall receive an amount of Rs 3 lakh or more by way of cash in aggregate from a person in a day; in respect of a single transaction; or in respect of transactions relating to one event or occasion from a person".

A panel headed by Chandrababu Naidu, Chief Minister of Andhra Pradesh, had also suggested imposing a limit on cash transaction in its interim report submitted just days before the Budget.