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Restriction on Cash Transactions [Section 269ST and 271DA]


In India, the quantum of domestic black money is huge which adversely affects the revenue of the Government creating a resource crunch for its various welfare programs. Black money is generally transacted in cash and large amount of unaccounted wealth is stored and used in form of cash.

In order to achieve the mission of the Government to move towards a less cash economy to reduce generation and circulation of black money, the Act has inserted the following section 269ST in the Act which provides as under:

(A) Restriction on receiving of amount of Rs. 2,00,000 or more [Section 269ST]:

No person shall receive on or after 1.4.2017, an amount of Rs. 2,00,000 or more—

(a)        in aggregate from a person in a day; or

(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 an account payee bank draft or use of electronic clearing system through a bank account:

(B) Section 269ST not to apply in the following cases [Proviso to Section 269ST]:

The provisions of section 269ST shall not apply to—

(i)         any receipt by—

(a)          Government;

(b)          any banking company, post office savings bank or co-operative bank;

(ii)        transactions of the nature referred to in section 269SS;

(iii)    such other persons or class of persons or receipts, which the Central Government may, by notification in the Official Gazette, specify.

 

(C)        Penalty for failure to comply with provisions of Section 269ST [Section 271DA]

(1)     If a person receives any sum in contravention of the provisions of section 269ST, he shall be liable to pay, by way of penalty, a sum equal to the amount of such receipt:

Provided that no penalty shall be imposable if such person proves that there were good and sufficient reasons for the contravention.

(2)     Any penalty imposable under section 271DA (1) shall be imposed by the Joint Commissioner.

(D) Mandating acceptance of payments through prescribed electronic modes [Section 269SU, 271DB]

Every person, carrying on business, shall, provide facility for accepting payment through the prescribed electronic modes, in addition to the facility for other electronic modes of payment, if any, being provided by such person, if his total sales, turnover or gross receipts in business exceeds 50 crore during the immediately preceding previous year.

Modes of payment for the purpose of section 269SU (Rule 119AA, w.e.f. 1.1.2020]

Every person, carrying on business, if his total sales, turnover or gross receipts, as the case may be, in business exceeds Rs. 50 Crore during the immediately preceding previous year shall provide facility for accepting payment through following electronic modes, in addition to the facility for other electronic modes of payment, if any. being provided by such person, namely:—

(i)         Debit Card powered by RuPay;

(ii)        Unified Payments Interface (UPI) (BHIM-UPI): and

(iii)       Unified Payments Interface Quick Response Code (UPI QR Code) (BHIM-UPI QR Code).

Further, it is proposed to make a consequential amendment in the Payment and Settlement Systems Act, 2007 so as to provide that no bank or system provider shall impose any charge upon anyone, either directly or indirectly, for using the modes of electronic payment prescribed under section 269SU of the Income-tax Act.

Penalty for failure to comply with provisions of section 269SU (Section 271DB inserted]

(1)     If a person who is required to provide facility for accepting payment through the prescribed electronic modes of payment referred to in section 269SU, fails to provide such facility, he shall be liable to pay, by way of penalty, a sum of five thousand rupees, for every day during which such failure continues:

Provided that no such penalty shall be imposable if such person proves that there were good and sufficient reasons for such failure.

(2)     Any penalty imposable under sub-section 271DB(1) shall be imposed by the Joint Commissioner of Income-tax.

 

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