This is bad news for those dealing in large sums of cash, particularly builders in Okhla. According to a report, from April 1 the Central Government will impose 100 per cent penalty on such transactions of more than Rs 3 lakh in an attempt discourage them.
In an interview to PTI, Revenue Secretary Hasmukh Adhia said 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.”
The receiver will pay the penalty. “If someone buys an expensive watch for cash, it is the shopkeeper who will have to pay the tax,” he said.
The move was mooted in Budget 2017-18 to stop “future generations” of unaccounted money from flowing into the financial system.
The curbs will mean that central government will monitor large cash transactions and “avenues of conspicuous consumption through cash” — meaning that unaccounted money spent on holidays or luxury items such cars, watches and jewellery will now be tracked, reported PTI.
Finance Minister Arun Jaitley had in his Budget for 2017-18 proposed to insert Section 269ST in the Income-Tax Act to state 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”.