Restrictions On Cash Transactions Lifted For Some Cases

Restrictions on cash dealings of Rs 2 lakh or more will not apply to credit card bill payments, business correspondents appointed by banks and issuers of prepaid instruments.

As a follow up to the demonetisation drive last year, the Finance Act, 2017 had banned cash transactions of Rs 2 lakh or above with effect April 1, 2017 with few exceptions. The section inserted in the Income-Tax Act from the beginning of this fiscal year, banned cash dealings of Rs 2 lakh or more on a single day, in respect of a single transaction or transactions relating to one event or occasion from an individual.

Any contravention would entail levy of 100% penalty on receiver of the amount. The intent behind this move was aimed to eradicate black money and encourage digital transactions to displace large cash transactions.