A) Restriction on receiving Cash above Rs. 2 Lakhs [Section 269ST & 271DA of the Income Tax Act, 1961]<\/strong><\/p>\n The government has placed\u00a0restriction on cash transaction by introduction of new sections 269ST & 271DA to the Income-tax Act. It has been provided that no person (other than those specified therein) shall receive an amount of two lakh rupees or more,<\/p>\n (a) in aggregate from a person in a day;<\/p>\n (b) in respect of a single transaction; or<\/p>\n (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.<\/p>\n Any contravention to the said provision shall attract penalty of a sum equal to the amount of such receipt<\/span>.<\/p>\n However, the said restriction is not applicable to<\/strong><\/span> any receipt by Government, banking company<\/strong>, post office savings bank or co-operative bank. It has also been decided that the restriction on cash transaction shall not apply to withdrawal of cash from a bank<\/span><\/strong>, cooperative bank or a post office savings bank. Necessary notification in this regard is being issued.<\/p>\n <\/p>\n B) Restriction on Capital Expenditure for Business in Cash above Rs. 10000\/- [Section 32\u00a0of the Income Tax Act, 1961]<\/strong><\/p>\n Where an assessee incurs any expenditure for acquisition of a depreciable asset<\/strong><\/em> in respect of which a payment (or aggregate of payment made to a person in a day), otherwise than by an account payees cheque\/ draft or use of electronic clearing system through a bank account, exceeds Rs. 10000\/-<\/strong><\/span>, such a payment shall not be eligible for normal\/ additional depreciation<\/strong><\/span>.<\/p>\n <\/p>\n C) Reduction in the limit of Cash Payment to Rs. 10000\/- in a Day [Section 40A(3) & 40A(3A) of the Income Tax Act, 1961]<\/strong><\/p>\n The monetary limit on revenue expenditure in cash has been reduced from Rs.20,000 to Rs.10,000<\/strong><\/span> (there is no change in the monetary limit pertaining to cash payment upto Rs. 35000\/- to Transport Contractors). Few exceptions are also provided in Rule 6DD of the Income Tax Rules. Consequently, any expenditure in respect of which payment (or aggregate of payment made to a person in a day), otherwise than by an account payee cheque\/ draft\/ use of electronic clearing system through a bank account, exceeds Rs. 10000\/-, no deduction shall be allowed in respect of such payment<\/strong><\/span> under section 30 to 37 of Income Tax Act, 1961.<\/p>\n <\/p>\n D) Lower Presumptive Profit of 6% for Cheque\/ Digital Receipts by small businesses [Section 44AD of the Income Tax Act, 1961]<\/strong><\/p>\n In order to promote digital payments in case of small unorganized businesses, the rate of presumptive taxation under section 44AD has been reduced from 8% to 6% for the amount of turnover realised through cheque\/digital mode.<\/p>\n E) Restriction on Cash Donation above Rs. 2000\/- received by Political Parties and Charitable Institutions<\/strong><\/p>\n Restriction on receipt of cash donation up to Rs. 2000 has been provided on political parties for availing exemption from Income-tax. Further, it has also mandated that any donation in cash exceeding Rs.2000 to a charitable institution shall not be allowed as a deduction under the Income-tax Act.<\/p>\n
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