Failing to meet direct tax collections target, the Income Tax (I-T) Department has started surgical strikes against cash transactions. The assessing officers have been directed to penalise those using cash while buying properties, luxury items like jewellery and cars or while paying bills at hospitals.
According to a senior official, the I-T Dept missed the tax collection target of Rs 12 lakh crore. “We have been directed to focus on new areas from the beginning of the new financial year,” said the official. “We have found about 27,000 cases of cash transactions in the purchase of properties where I-T laws were violated. We need to recover about Rs 5,500 crore soon,” he said.
As per the law of the Central Board of Direct Taxes (CBDT) effective from June 1, 2015, any transaction in real estate, including agricultural land is required to be made through account payee cheque or the real time gross settlement (RTGS) or electronic funds transfer if the amount is Rs 20,000 or above. If a transaction is done in cash, then the penalty of an amount equal under Section 271 D of the Income Tax Act is imposed on the seller.
More than 1,100 such cases of cash transaction of more than Rs 2 lakh were recorded last financial year. According to Section 269ST of the Income Tax Act, no person can receive Rs 2 lakh or more from another person in one day. Income tax authorities imposed penalties of about Rs 45 crore in such transactions along with another Rs 45 crore on top hospitals and luxury brand showrooms for violations.