Though cash transactions of over ₹2 lakh have been banned, the Income-Tax Department in Mumbai has detected such transactions of about ₹400 crore in 191 cases. The assessees who have dealt in cash transactions of over ₹2 lakh in FY 2017-18 have breached Section 269 ST of Act and have come under the radar of the Department.
A senior IT official said the taxpayers, who have violated the law, will have to pay a penalty equivalent of the amount they have transacted.
The official pointed that many times when cash generated out of tax avoidance was found in raids by IT officers, assessees claimed innocence by stating that the amount was raised as loans from friends and family members. Therefore, to put a squeeze on black money movement, in Finance Bill of 2017, a fresh section 269ST was inserted in the IT Act, which imposed restriction on a cash transaction and limited it to below ₹2 lakh per day, “In a way, the new section was a surgical strike on such black money transactions,” the official said.
The Section 269ST states that no person shall receive an amount of ₹2 lakh or more, in aggregate from a person in a day or in respect of a single transaction or in respect of transactions relating to one event or occasion from a person.
The office of the Director of Income Tax ( Intelligence and Criminal Investigation) is very active on the issue and has instructed all Principal Chief Commissioners to act on such violators. Data mining has been used to sift through data and the Department has zeroed in on those violators for 2017-18. Individual assessees and even companies in business as diverse as shipping, food, cargo and digital payments have shown up on the list.
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