Page 36 - Banking Finance January 2020

ARTICLE

Payments): How it will curb black money has been that in the above mentioned situations the
detailed later within heading "SUGGESTION ON receiver of the cash is liable to be penalised
CASHLESS INDIA". A few measures taken by and not the payer.
Government are:
Y Section 40A(3) of the Income Tax Act pertains
a) DigiShala, which is an educational and non- to cash transaction limit for expenditure made
commercial TV channel on DD Free Dish. in cash for businesses. Under this section, if
b) "Digital Finance for Rural India: Creating payment for any expenditure of over Rs.10,000
Awareness and Access through Common Service is made in cash, then the expenditure will be
Centers (CSCs)" under Digital Saksharta Abhiyan disallowed under the Income Tax Act.
(DISHA).
Y Under section 43 of Income Tax Act, if a
c) 'Vittiya Saksharta Abhiyan (VISAKA)' payment of more than Rs. 10,000 is done by a
d) Introduction of user friendly digital modes/Apps like person (assessee) for acquiring an asset by
BHIM UPI (Unified Payments Interface), BHARAT cash, the expenditure would be ignored for the
QR, BBPS (Bharat Bill Payment System), USSD purposes of determination of cost of
(Unstructured Supplementary Service Data), Micro acquisition of the asset, which means capital
ATM, AEPS (Aadhar Enabled Payment System) etc. gain tax impact will be more. Hence, it is
important taxpayer make all payments for
e) Following provisions have been proposed in Finance
acquisition of an asset to the seller through
bill, 2019:
Y TDS (Tax Deduction at Source) of 2 percent on banking channels.
cash withdrawal exceeding INR 1 crore in a Y Section 269SS prohibits a taxpayer from
year from a bank account to be levied. taking/accepting loans or deposits or a sum of
more than Rs.20,000 in cash. Barring a few
Y The business establishments with an annual
turnover of more than INR 50 crores shall offer exceptions, all loans and deposits of more than
low-cost digital modes of payment (BHIM, UPI, Rs.20,000 must always be taken through a
UPI- QR Code, etc.) to their customers. banking channel.
Y No charges or merchant discount rate shall be 5. Other Measures:
imposed on customers and merchants. Costs Y Income Disclosure Scheme 2016
shall be absorbed by banks and RBI. Y Prime Minister Garib Kalyan Yojna
f) Following provisions have been made in other Y Amendments in Money Laundering Act
recent Finance bills.
Y Aadhaar linking of bank accounts
A new section 269ST was inserted in the Income
Tax Act through Finance Act 2017, which imposed Major benefits of the recent measures
restriction on a cash transaction and limited it to taken by the government:
Rs.2 Lakhs per day. It restricted any person from
receiving an amount of Rs 2 Lakh or more either in While major benefits have already been discussed above, we
aggregate in a day from a person, or against a discuss herebelow the most significant benefits of
single transaction or against a transaction demonetization.
pertaining to one event or occasion. 1. High denomination notes have been brought down by
Y In case of violation of above rule, the violator about Rs 6 lakh crores.
will be liable to a penalty of an amount 2. As on 27th October 2017, currency in circulation (CIC)
equivalent to the amount of transaction. was lower by 8% on year on year basis as against an

Y Receiving or repaying Rs 20,000 or more in increase of 17.2% in the previous year. It represents a
cash for transfer of immovable property can net decline in CIC of approximately 20%. This is a sign
invite tax trouble or penalty. It is to be noted of Less Cash and Digital India.

36 | 2020 | JANUARY | BANKING FINANCE