CBDT Notifies Amendment to Section 269ST of Income Tax for ‘No Penalty on Cash Withdrawals above Rs. 2 Lacs from Banks’
Certain restriction on cash transaction have been placed thru insertion of new Sections 269ST & 271DA under 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, it may be noted that said restriction is not applicable to any receipt by Government, banking company, post office savings bank or co-operative bank.
Subsequently, CBDT has amended the provisions u/s 269ST relating to penalty for Cash withdrawal transactions with bank/ co-op. bank/ post office savings bank above Rs. 2 Lac. Now such transactions are not subject to penalty as per the Notification dt. 5 Apr. 2017, as under:
S.O. 1057(E).—In exercise of the powers conferred by clause (iii) of the proviso to section 269ST of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that the provision of section 269ST shall not apply to receipt by any person from an entity referred to in sub-clause (b) of clause (i) of the proviso to section 269ST.
2. The notification shall be deemed to have come into force with effect from 1st day of April, 2017.