Section 269ST deals with restriction on acceptance of cash payment with regard to any transaction above Rs. 2 lakh. Relevant extract of the section are as under:
“No person shall receive an amount of two lakh rupees or more—
(a) in aggregate from a person in a day; or
(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 an account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed”
If a person accepts any amount above the prescribed limit he shall be liable for penalty u/s 271DA which shall be equal to 100% of such amount.
Do remember that the penalty is on the person accepting such payment and not on the person making the payment.
Now looking at the current situation of pandemic CBDT has vide notification Dt. 07.05.2021 decided to provided a relaxation to hospitals and other centres which are providing Covid treatment from the above provision and hence now they can accept cash above Rs. 2 lakh.
“hereby specifies Hospitals, Dispensaries, Nursing Homes, Covid Care Centres or similar other medical facilities providing Covid treatment to patients for the purpose of Section 269ST of the Income-tax Act,1961 for payment received in cash during 01.04.2021 to 31.05.2021, on obtaining the PAN or AADHAAR of the patient and the payee and the relationship between the patient and the payee by such Hospitals, Dispensaries, Nursing Homes, Covid Care Centres or similar other medical facilities.”
Hence, although the relief has been provided but same is for a limited period i.e. 01.04.2021 to 31.05.2021. Hence, only cash received during such period will not be liable for penalty u/s 271DA.
Further, there are conditions which needs to be fulfilled i.e. Aadhar, PAN and relation between patient and payee needs to be known and who knows in future government might bring an SFT for same and ask for an explanation for such cash payment.
To download full notification CLICK HERE.