In a bid to implement
the government’s mission to make India a cashless or less cash country and weed
out corruption, the Income Tax Department has again warned people to refrain
from large cash transactions, contravention of which may result in the levy of
penalty or disallowance of tax deductions.
Following are the five
transactions that Income Tax Department doesn’t want you to do.
1. Don’t accept cash of Rs 2,00,000 or more in
aggregate from a single person in a day or for one or more transactions relating
to one event or occasion. Instead of cash, you are advised to
use an account payee cheque or account payee bank draft or use of electronic
clearing system through a bank account for such transactions. However, the said
restriction shall not apply to government, any banking company, post office
savings bank, co-operative bank or a person notified by the Central Government.
Section 271DA of the Income Tax Act provides for levy of penalty on a person
who receives a sum in contravention of the provisions of section 269ST. The
penalty shall be equal to the amount of such receipt. However, the penalty
shall not be levied if the person proves that there were good and sufficient
reasons for such contravention.
2. Don’t receive or repay specified sum exceeding
Rs 20,000 or more in cash for transfer of immovable property and
use account payee cheque or account payee demand draft or use of electricity
clearing system through a bank account. “Specified sum” means any sum of money
receivable, whether as advance or otherwise, in relation to transfer of an
immovable property, whether or not the transfer takes place. Contravention of
the provisions of section 269 SS will attract penalty under section 271 D.
Penalty under section 271 D shall be levied of an amount equal to loan or
deposit taken or accepted.
3. Don’t pay more than Rs 10,000 in cash relating
to expenditure of business/ profession. If such expenses exceeding
Rs 10,000 are made in any mode, other than by an account payee cheque drawn on
a bank, or account payee bank draft, or use of electronic clearing system
through a bank account, no deduction shall be allowed in respect of such
expenditure in the profit and loss account.
4. Don’t donate in excess of Rs 2,000 in cash to a
registered trust or political party. Not only you won’t be able
to claim deductions under section 80G of the Income Tax Act for such donations,
but appropriate actions would be initiated against the trust or political party
for encouraging money laundering.
5. Don’t pay health insurance premiums in cash. If
you make any payment in cash on account of premium on health insurance
facilities, you won’t get deductions under Section 80D of the Income Tax Act.
So, it is advisable for
your own good not to violate the above rules, as the Income Tax Department is
seeking information regarding such violations, black money or benami
transactions.
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