Aiming to curb the generation of black money, the government is considering 100% penalty on cash transactions above Rs 3 lakhs. From April 1, those dealing in large sums of cash will have to pay a steep price: the central government will impose 100 per cent penalty on such transactions of more than Rs 3 lakh in an attempt discourage them.
For Example, if you do a transaction of Rs 4 lakh in cash, then the penalty would be Rs 4 lakh. If you do a transaction of Rs 50 lakh, penalty would be Rs 50 lakh. The receiver will have to pay an amount equivalent to the cash received. Demonetization brought to account the stock of black money and now the government wants to stop future generation of the same. The government, he said, will track all large cash transactions, and also curb the avenues of conspicuous consumption through cash.
People with large sum of unaccounted money usually spend it on holidaying or buying luxury items like cars, watches, jewelry and land. The new cash curbs will mean that such spending avenues are curtailed, distinctiveness people from generating black money. Adhia said that the previously notified rule of quoting PAN for any cash transaction above Rs 2 lakh stays.
However, the restrictions will not apply to the government, any banking company, post office savings bank or co-operative bank. Adhia said the Budget proposes to levy penalty on a person who receives Rs 3 lakh and above.