Govt to impose stiff penalty on cash transactions above Rs 3 lakh: Revenue secy

A ban on cash transaction of more than Rs 3 lakh has been proposed in the Budget for 2017-18.

Govt to impose stiff penalty on cash transactions above Rs 3 lakh: Revenue secy

Following the Union budget, a steep penalty awaits those accepting cash in excess of Rs 3 lakh, beginning April 1, to settle any transaction.


A ban on cash transaction of more than Rs 3 lakh has been proposed in the Budget for 2017-18.

Revenue Secretary Hasmukh Adhia said in an interview that the penalty for doing cash transaction will be steep and the receiver will have to pay an amount equivalent to the cash received. He added that the provision is to deter people from doing large cash transactions.

"Demonetisation brought to account the stock of black money and now the government wants to stop future generation of the same.The government," he said, "will track all large cash transactions, and also curb the avenues of conspicuous consumption through cash."

Adhia said that the previously notified rule of quoting PAN for any cash transaction above Rs 2 lakh stays.

In the Union Budget 2017-18, Union Finance Minister Arun Jaitley proposed to  insert Section 269ST in the Income-Tax Act to state that "no person shall receive an amount of Rs 3 lakh or more by way of cash in aggregate from a person in a day; in respect of a single transaction; or in respect of transactions relating to one event or occasion from a person".

However, the restrictions will not apply to the government, any banking company, post office savings bank or co-operative bank. Adhia said the Budget proposes to levy penalty on a person who receives Rs 3 lakh and above.