Cash transaction of over Rs 2 lakh to entail 100 per cent penalty

New Delhi: The Income Tax Department on Friday announced that a 100 per cent penalty will be levied against the receiver, while transacting in cash of Rs 2 lakh or above.

"Cash transaction of Rs 2 lakh or more is prohibited with effect from April 1. Contravention of Section 269ST (of the Income Tax Act of 1961) will entail a levy of 100 per cent penalty on the receiver of the amount," the department said in an advertisement in leading dailies here.

Section 269ST has been inserted in the Act with effect from April 1 to restrict acceptance of cash of Rs 2 lakh or more by any person.

It disallows cash transaction of Rs 2 lakh or more by 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, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account.

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The restriction shall not apply to any receipt by the government or any receipt by or from any banking company, post office savings bank or cooperative bank.

The Income Tax Department also asked people to send any information on black money, 'benami' (proxy) or such cash transaction through email at [email protected].

With IANS Inputs