Mode of undertaking transactions under section 269ST of the Income-tax Act, 1961.
Explanation:
No person shall receive an amount of Rs. 2 lakh or more—
(a) in aggregate from a person in a day; or
(b) in respect of a single transaction; or
(c) in respect of transactions relating to one event or occasion from a person,
otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed.
This section shall not apply if
(i) amount received by —(a) Government; (b) any banking company, post office savings bank or co-operative bank;
(ii) transactions of the nature referred to in section 269SS;
(iii) such other persons or class of persons or receipts, which the Central Government may, by notification in the Official Gazette, specify.
Penalty for non compliance of section 269ST
If a person receives any sum in contravention of the provisions of this section, he shall be liable to pay, by way of penalty, a sum equal to the amount of such receipt:
Provided that no penalty shall be imposable if such person proves that there were good and sufficient reasons for the contravention.
Any penalty imposable under this section shall be imposed by the Joint Commissioner.
Check out the Recent Notification of CBDT
Reporting under Tax Audit Report (FORM 3CD)
Clause 31 (ba), (bb), (bc), (bd), of the Tax audit report (form 3CD) deals with the reporting of transactions covered under section 269ST.
Extract of the Tax Audit Report is given below:
(ba) Particulars of each receipt in an amount exceeding the limit specified in section 269ST, in aggregate from a person in a day or in respect of a single transaction or in respect of transactions relating to one event or occasion from a person, during the previous year, where such receipt is otherwise than by a cheque or bank draft or use of electronic clearing system through a bank account:—
(i) Name, address and Permanent Account Number or Aadhaar Number (if available with the assessee) of the payer;
(ii) Nature of transaction;
(iii) Amount of receipt (in Rs.);
(iv) Date of receipt;
(bb) Particulars of each receipt in an amount exceeding the limit specified in section 269ST, in aggregate from a person in a day or in respect of a single transaction or in respect of transactions relating to one event or occasions from a person, received by a cheque or bank draft, not being an account payee cheque or an account payee bank draft, during the previous year;—
(i) Name, address and Permanent Account Number or Aadhaar Number (if available with the assessee) of the payer;
(ii) Amount of receipt (in Rs.);
(bc) Particulars of each payment made in an amount exceeding the limit specified in section 269ST, in aggregate to a person in a day or in respect of a single transaction or in respect of transactions relating to one event or occasions to a person, otherwise than by a cheque or bank draft, or use of electronic clearing system through a bank account, during the previous year:—
(i) Name, address and Permanent Account Number or Aadhaar Number (if available with the assessee) of the payee;
(ii) Nature of transaction;
(iii) Amount of payment (in Rs.);
(iv) Date of payment;
(bd) Particulars of each payment made in an amount exceeding the limit specified in section 269ST, in aggregate to a person in a day or in respect of a single transaction or in respect of transitions relating to one event or occasions to a person, made by a cheque or bank draft, not being an account payee cheque or an account payee bank draft, during the previous year:—
(i) Name, address and Permanent Account Number or Aadhaar Number (if available with the assessee) of the payee;
(ii) Amount of payment (in Rs.);
Note: (Particulars at (ba), (bb), (bc) and (bd) need not be given in the case of receipt by or payment to a Government company, a banking Company, a post office savings bank, a cooperative bank or in the case of transactions referred to in section 269SS or in the case of persons referred to in Notification No. S.O. 2065(E) dated 3rd July, 2017);]
Payment received in cash under Section 269ST of the Income-Tax Act- (PART-II)
Summary:
Government by notification (link attached above) exempts Hospitals, Dispensaries, Nursing Homes, Covid Care Centres, or similar other medical facilities. It means the provisions of section 269ST will not apply to such entities from 01.04.2021 to 31.05.2021 and it can accept the payment/(s) above Rs. 2 Lakhs in cash also and accordingly, relevant penalty provision shall not apply to such transactions entered during such period.
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