Ban on cash transactions of over Rs 2 lakh not applicable for bank, post office withdrawals

The ban on cash transactions of more than Rs.2 lakh a day will not apply to withdrawals from banks, post office savings accounts and cooperative banks, the Central Board of Direct Taxes said. 

The Finance Act 2017 prescribed to impose a penalty equal to the transacted amount on those who violated the rule restricting cash transactions. It provides that no one can deal in cash in excess of Rs.2 lakh a single day, in respect of a single transaction or transactions relating to one event or occasion. 

The restrictions will also not apply to any receipt by government, banking company, post office savings bank and cooperative bank, the CBDT said in a statement. 

A notification will be issued to implement this change. 

To curb large cash transactions and discourage black economy, finance minister Arun Jaitley had in the 2017-18 budget proposed to ban transaction of over Rs.3 lakh a day. This limit was lowered to Rs.2 lakh through an amendment to the Finance Bill 2017 that was later passed by Parliament. In another related measure, the Finance Act said any capital expenditure in cash exceeding `10,000 shall not be eligible for claiming depreciation allowance or investment-linked deduction. Similarly, the limit for revenue expenditure in cash has been cut to `10,000 from `20,000. 

AADHAAR FOR NON-RESIDENTS 

Only those who are eligible to obtain Aadhaar will need to quote the number while filing income tax return, the income tax department has clarified. The Finance Act 2017 has made it mandatory for taxpayers to quote Aadhaar or the enrolment ID of Aadhaar application form for filing of income tax returns. It has also been made compulsory for applying for the income tax permanent account number with effect July 1, 2017. 

“It is clarified that such mandatory quoting of Aadhaar or enrolment ID shall apply only to a person who is eligible to obtain Aadhaar number... Accordingly, the requirement to quote Aadhaar as per section 139AA of the Income-Tax Act shall not apply to an individual who is not a resident as per the Aadhaar Act, 2016,” an official statement said. 

Residents as per the Act means an individual who has resided in India for at least 182 days in the 12 months immediately preceding the date of application for the enrolment. “CBDT has clarified that an expat, if he has stayed for more than 182 days in India in the past 12 months and is paying taxes in India would be required to apply for an Aadhaar card. Many expats may not have been prepared for this as they were expecting a leeway from applying for an Aadhaar card. Expats who have left the country should file their taxes before 1st July, 2017,” said Amit Maheshwari Partner, Ashok Maheshwary & Associates LLP. 

As per the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, only a resident individual is entitled to obtain Aadhaar.

Source:-The Economic Times