1) One of the biggest issues faced by the Indian Economy is Black Money.
2) In order to solve the issue, the Government of India has been continuously initiating various strategic attempts in order to curb black money.
3) The root cause of black money is attributable to cash transactions between parties in India.
4) Therefore, the Government has taken specific initiatives to impose a limit of cash transactions.
5) Section 269ST of Income Tax Act was introduced to curb black money by restricting cash transactions.
Exceptions under Section 269ST
– The Government
– Any banking company
– Any post office savings bank
– Any co-operative bank
– Transactions with a nature mentioned under Section 269SS of the Income Tax Act are considered exceptions under this Section.
– Any other individual/ person or a class of persons or receipts that the Central Government may specify through the notification in the Official Gazette
Penalities
– Any individual who violates the provisions provided under section 269ST of income tax act by receiving in cash amount of Rs. 2 lakh or exceeding rs .2 lakhs shall be liable to pay a particular sum of amount as penalty for the violation. However, if the individual has valid reasons for the contravention and if the court is satisfied by the reasons then no such penalty will be levied on the said individual.
– The main intent behind the insertion of section 269ST of the income tax act is to pave way for the digital economy and also try to curtail the facilitation of black money in an effective way.
– A new section 271DA was introduced under the Income-tax act. This section states that any person who receives any sum which violates the provisions laid down in section 269ST will be liable to pay as a penalty a sum equal to the amount.
– Penalty laid down under section 271DA (1) shall be imposed by the joint or additional commissioner of income tax. If the individual fails to establish good and sufficient reason then the penalty shall be levied on him.