Today, the Central Board of Direct Taxes (CBDT) issued a press release clarifying that the restrictions on cash transactions as introduced in the Finance Bill will not be applicable to cash withdrawals from banks, post offices, co-operative banks etc. The significant part of the press release is as below;
“Various legislative steps have been taken by the Finance Act, 2017 to curb black money by discouraging cash transaction and by promoting digital economy.
These prominently include placing restriction on cash transaction by introduction of New Sections 269ST & 271DA to the Income-tax Act. It has been provided that no person (other than those specified therein) shall receive an amount of two lakh rupees or more,
(a) in aggregate from a person in a day;
(b) in respect of a single transaction; or
(c) in respect of transactions relating to one event or occasion from a person,
otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account.
Any contravention to the said provision shall attract penalty of a sum equal to the amount of such receipt. However, the said restriction is not applicable to any receipt by Government, banking company, post office savings bank or co-operative bank. 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. Necessary notification in this regard is being issued.”
Earlier, there were restrictions on any cash transactions over 2 lakhs. The new press release published in the official web site of the IT department, however, indicates that the ban on cash withdrawals from banks, post offices etc, have been removed.
