Cash Payment of Rs. 10,000 Prohibited

In order to curb black money as well as to encourage digital transactions and limit the number of cash transactions, the government has now laid down some new rules and prohibited some types of cash payments. Govt. of India has capped cash transactions at Rs 2 lakh since March 2017. Now as per the fresh proposal, people now also need to pay a service charge on all cash transactions above Rs 2 lakh.

Apart from prohibiting Rs 2 lakh and more cash transactions, the government has now put a ban on some types of cash payments even of a lesser amount. Now accepting cash of Rs 2 lakh or more from a single person in a day or for one or more transactions relating to one event or occasion is forbidden now. Also, no one can receive or repay Rs 20,000 or more in cash for transfer of immovable property now. One thing more is that paying more than Rs 10,000 in cash relating to expenditure of a business or profession is also banned.

What this means to the general public is that you need to be more careful while making cash transactions. The Income Tax Department says, “A contravention of these rules may result in levy of penalty. Any information regarding such violations or black money or Benami transactions can be given to the jurisdictional Principal Commissioner of Income Tax or can also be emailed to blackmoneyinfo@incometax.gov.in.

So, it is in your own personal interest that you must be careful while doing cash transactions. You must make payments digitally or by a cheque wherever possible. ‘Go Cashless, Go Clean’! This is what the government is saying.