The Income Tax Department explained that the maximum cash transaction 2 lakh, as declared in the Finance Act will not apply to withdrawals from banks or post office. Restrictions on cash transactions will not apply to cash withdrawals from the Bank or the Post Office Savings Bank.
In a move to control the black money, the government set the ceiling of Rs.2 lakh on cash transactions. The penalty for violating this is a fine equivalent to the transaction amount. An amendment has been introduced in the 2020 Finance Bill, which has been approved by Parliament. No person (except those specified therein) shall receive an amount of Rs 2 lakh or more,together of one person in one day With respect to a single transaction Or with respect to transactions related to an event or occasion of a person,other than by an account paycheque or an account beneficiary bank project or the use of an electronic clearing system through a bank account, the department.
The other major announcements in the finance bill include, restriction on receipt of cash donation of up to Rs 2,000 for political parties and reduction of presumptive taxes for the small unorganized business 8 percent to 6 percent for the amount of turnover realized through cheque or digital mode.