Finance Minister Arun Jaitley announced the budget on February 1 and he had clearly proposed that “no person can receive an amount of ₹ 3 lakh or more by cash in aggregate from a person in a day in respect of a single transaction or in respect of transaction relating to one event or one occasion.”  

 

Now the government has decided to discourage cash transactions in large amounts even further. If you receive cash worth ₹ 3 lakh or more in cash, get ready to pay a 100% penalty effective from April 1, 2017.

 

Revenue Secretary Hasmukh Adhia has confirmed the above and said that the penalties for doing cash transaction above the specified limit will turn out to be double-costly for commoners now.

 

"Supposing 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, the penalty would be Rs 50 lakh,” Adhia said.

 

Now there is a twist here; the fine will not be paid by the one who is paying but the one who will be receiving the cash in large amount. Governments, banking companies, post offices and co-operative banks have been exempted from this restriction.

 

However, Adhia stated that the previous rule of asking for PAN card for any cash transaction above ₹ 2 lakh will continue to remain as it was.