Services Exempt From Rs. 2 Lakh Cash Transaction Limit Notified

aasavri Rai

4 July 2017 11:56 AM GMT

  • Services Exempt From Rs. 2 Lakh Cash Transaction Limit Notified

    The Department of Revenue, in the exercise of its powers under Section 269ST(iii) of the Income Tax Act 1961, has notified the list of transactions that shall not be subject to the aforementioned provision.This provision was introduced by the Finance Act 2017, with effect from April 1, 2017, and sets a limit on cash transactions up to Rs. 2 lakh and penalises transactions exceeding this...

    The Department of Revenue, in the exercise of its powers under Section 269ST(iii) of the Income Tax Act 1961, has notified the list of transactions that shall not be subject to the aforementioned provision.

    This provision was introduced by the Finance Act 2017, with effect from April 1, 2017, and sets a limit on cash transactions up to Rs. 2 lakh and penalises transactions exceeding this limit. The same was enacted to curb the menace of black money and tax evasion.

    The notification has a retrospective application and shall be deemed to have come into effect from April 1, 2017.

    The Section shall not apply to the following services:



    1. Receipt by a business correspondent on behalf of a banking company or co-operative bank, in accordance with the guidelines issued by the Reserve Bank of India.

    2. Receipt by a white label automated teller machine operator from retail outlet sources on behalf of a banking company or co-operative bank, in accordance with the authorisation issued by the Reserve Bank of India under the Payment and Settlement Systems Act, 2007 (51 of 2007).

    3. Receipt from an agent by an issuer of pre-paid payment instruments, in accordance with the authorisation issued by the Reserve Bank of India under the Payment and Settlement Systems Act, 2007 (51 of 2007).

    4. Receipt by a company or institution issuing credit cards against bills raised in respect of one or more credit cards

    5. Receipt which is not includible in the total income under clause (17A) of section 10 of the Income Tax Act, 1961.

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