associate sponsors

Llyod
HDFC

Rs 2 lakh limit not applicable for bank, post office savings accounts withdrawals, says CBDT

Ban on cash transaction in excess of Rs 2 lakh will not be applicable to withdrawals from banks and post office savings accounts, the income tax department said today.

Through the Finance Act 2017, the government has banned cash transactions of over Rs 2 lakh and said a penalty of an equal amount would be levied on the receiver.

In a clarification on the newly inserted Section -- 269ST -- in the I-T Act, the Central Board of Direct Taxes (CBDT) said the restriction shall not apply to withdrawal from banks and post offices.

PTI

PTI

"It has also been decided that the restriction on cash transaction shall not apply to withdrawal of cash from a bank, co-operative bank or a post office savings bank," the statement said.

It said necessary notification in this regard would be issued.

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 last month.

The said restriction is also not applicable to any receipt by government, banking company, post office savings bank or co-operative bank, the CBDT said.

The move to ban cash transaction above a threshold was aimed at curbing black money by discouraging cash transaction and promoting digital economy.

According to the rule, no individual can deal in cash in excess of Rs 2 lakh on a single day, in respect of a single transaction or in respect of transactions relating to one event or occasion from an individual.

The Finance Act also provides that any capital expenditure in cash exceeding Rs 10,000 shall not be eligible for claiming depreciation allowance or investment-linked deduction. Similarly, the limit on revenue expenditure in cash has been reduced from Rs 20,000 to Rs 10,000.

In order to promote digital payments in case of small unorganised businesses, the rate of presumptive taxation has been reduced from 8 percent to 6 percent for the amount of turnover realised through cheque/digital mode.

Also, it has restricted cash donation up to Rs 2,000 for political parties for availing exemption from income tax.

"Further, it has also mandated that any donation in cash exceeding Rs 2,000 to a charitable institution shall not be allowed as a deduction under the Income-tax Act," the CBDT statement said.


Updated Date: Apr 06, 2017 11:25 AM

Also Watch

Watch: The true stories from Dharavi that inspired Rajinikanth's Kaala
  • Thursday, March 8, 2018 Watch: Cyrus Khan talks about Parkour, jumping across walls and why he hates sitting
  • Thursday, May 31, 2018 Unwind: India's basketball sensation Amjyot Singh has his eyes set on becoming an NBA regular
  • Monday, May 28, 2018 First Day First Showsha — Review of Solo: A Star Wars Story in 10 questions
  • Saturday, May 19, 2018 Social Media Star: Rajkummar Rao and Bhuvan Bam open up about selfie culture, online trolls


{if $hideJSforEU != 'yes'} {/if}