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2017

Revised Section 269ST

As per the Finance Bill, 2017 a new section 269ST is introduced. The provisions of the section are as follows:

Provisions:

  • No Person shall receive an amount of three lakh rupees or more,
    1. in aggregate from a person in a day;
    2. in respect of a single transaction; or
    3. 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.
  • Provided that the provisions of this section shall not apply to —
    1. any receipt by —
      1. Government;
      2. any banking company, post office savings bank or co-operative bank;
      3. transactions of the nature referred to in section 269SS;
    2. transactions of the nature referred to in section 269SS;
    3. such other persons or class of persons or receipts, which the Central Government may, by notification in the Official Gazette, specify.

Applicability:

  • If any person accepts Rs. 3 Lakhs (Three Lakhs) or more from the same person in consideration of a single transaction/ multiple transactions of the same nature / multiple transactions with different nature then this section will get attracted.
  • The said restriction shall not apply to Government, any banking company, post office savings bank or co-operative bank.

Penalty Provision:

  • As per sec 271DA, if a person receives any sum in contravention of the provisions of section 269ST, he shall be liable to pay, by way of penalty, a sum equal to the amount of such receipt i.e 100% penalty
  • Provided that no penalty shall be imposable if such person proves that there were good and sufficient reasons for the contravention.

Explanation to Sec 269ST with examples:

  1. If one sells goods worth Rs. 4,50,000/- through three different bills of Rs.1,50,000/- each to one person and accepts fully in cash in a single day at different times then section 269ST(a) will get violated.
  2. If one sells goods worth Rs 4,00,000/- through single bill to another person and receives cash of Rs. 2,00,000/- on day 1 and another 2,00,000/- on day 2 then section 269ST(b) will get violated.
  3. If one accepts cash of Rs.1,00,000/- for wedding hall rent, Rs.1,50,000/- for catering service and Rs.1,50,000/- for mandap decoration, then section 269ST(c) will get violated even if cash is accepted on different dates.
Financial Management