A new Section 269 ST has been introduced to curb cash transactions. No person shall receive an amount of Rs 2,00,000  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.

Section 269ST is introduced by Finance Act, 2017 with effect from 01.04.2017 and put a limit on Cash Transaction to put a check on Black Money and Tax Theft. Section is much talked about section as it provides penalty for any cash transaction above the value of Rs. 2 Lakh, equal to the Transaction amount.

HIGHLIGHTS OF SECTION 269ST:

The new section 269ST doesn’t overpower all other sections. Thus all cash transaction limits defined by any other section in any other act or law remains the same. Thus this limit is levied on all other transaction which were not under purview of any other section, rules or provision.

The restriction of cash payment is applicable to all transactions irrespective of the fact that whether the receipt was made with or without consideration.

EXEMPTION PROVISION FROM RULES OF SECTION 269ST:

The provisions of this section shall not apply to—

(i) Any receipt by—

(a) Government;

(b) Any banking company, post office savings bank or co-operative bank;

(ii)Transactions of the nature referred to in section 269SS (thus all transaction of repayment of loan and transfer of immovable property would still be restricted to Rs.20,000 only);

(iii) Such other persons or class of persons or receipts, which the Central Government may, by notification in the Official Gazette, specify.

(iv)In the budget speech, it seems there was a preposition of the sections not to be applicable in case sale of agricultural produce by any person being an individual or Hindu Undivided Family. However it seems that the above provision has been omitted due to some mistake and later on may be included therein.

PENALTY IN CASE OF CONTRAVENTION THE PROVISION OF SECTION 269ST:

A new section 271DA is proposed to be introduced under Income Tax laws and rules.

As per section 271DA of Income Tax Act, if a person receives any sum in contravention any of the provisions and rules of section 269ST, he shall be liable to pay penalty of amount sum equal to the amount of such receipt received in cash.

Thus in simple terms the penalty amount would be 100% of the amount received in contravention of this section.