Union Finance Minister Arun Jaitley announced the banning of Cash Transactions higher than Three Lakhs in his budget speech last week. But then the modalities of that decision were not announced. It is now emerging that Center is going to levy 100% Penalty for the Cash Transactions above 3 Lakhs.
The Penality have to be borne by the receiver. If the amount is 50 Lakhs and the penalty will be 50 Lakhs. This is a major step in the eradication of Black Money. It has to be seen how the Central Government will be implementing this rule.
The government is keen on tracking all large cash transactions, and also curb the avenues of conspicuous consumption through cash. The rule of abolishing more than 3 Lakh Cash Transactions will be inserted as Section 269ST in the Income Tax Act.
