In a move aimed at curbing black money by discouraging cash transactions and promoting digital economy, the Income Tax department today warned people against indulging in cash transaction of Rs 2 lakh or more.
Issuing a public advertisement in leading dailies today, the tax department said that anyone found violating the norms will have to cough up an equal amount as penalty.
It also advised people having knowledge of such dealings to tip-off the tax department by sending an email to 'blackmoneyinfo@incometax.gov.in'.
The government has banned cash transactions of Rs 2 lakh or more from April 1, 2017, through the Finance Act 2017. The newly inserted section 269ST in the Income Tax Act bans such cash dealings on a single day, in respect of a single transaction or transactions relating to one event or occasion from an individual.
"Contravention of Section 269ST would entail levy of 100 per cent penalty on receiver of the amount," the tax department said.
In the 2017-18 budget, Finance Minister Arun Jaitley had proposed to ban cash transaction of over Rs 3 lakh. This limit was lowered to Rs 2 lakh as an amendment to the Finance Bill, which was passed by the Lok Sabha in March.
The restriction is not applicable to any receipt by government, banking company, post office savings bank or co- operative bank, the tax department said.
The tax department had started the email address 'blackmoneyinfo@incometax.gov.in' in December last year post the demonetisation of 500- and 1000-rupee notes. It had then asked people having knowledge about conversion of black money into black/white to inform the government through this mail id.
Post demonetisation, people with unaccounted wealth had illegally converted their black money held in old notes to new Rs 500 and Rs 2,000 notes.
The government had come out with a tax amnesty scheme PMGKY (Pradhan Mantri Garib Kalyan Yojana) under which people holding unaccounted cash could come clean by declaring their wealth and pay 50 per cent as tax and penalty.
Revenue Secretary Hasmukh Adhia yesterday informed that response to the PMGKY has ‘not been so good’ as only Rs 5,000 crore unaccounted income was declared under the amnesty scheme.
"The response (to the PMGKY) has not been so good...about Rs 5,000 crore of income was declared in PMGKY. There are mainly two factors for it. One, even before the scheme was announced people had tried to put their cash into different accounts. Second was the (tax and penalty) rate," he had said.
The scheme was launched in December last year to enable people with black money to come clean by paying tax and penalty of 50 per cent.
