Presented by: CA Vijay Kr - PowerPoint Presentation

1. Presented by:CA Vijay Kr Agrawal, JAIPURMCOM,FCA,DISA,DIRM,LLB,NDDY, CCCA, CCFAFD, DATPhone: +91 9828149043 Email: catvijay@yahoo.comCash Transaction

2. Areas Covered:Cash Payment (Section 40A(3),(3A),269ST & 43(1))Cash Received (Section 269 SS and ST)Cash Reporting (Rule 114E)Quoting of PAN (Section 139A & Rule 114B)

3. Cash Payment (Section 40A(3))Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque/ Draft, exceeds Ten thousand rupees, No deduction shall be allowed in respect of such expenditure.

4. (Section 40A(3A))Where an allowance has been made for any liability incurred for any expenditure in any assessment year and subsequently during any year the assessee makes payment in respect thereof, otherwise than by an account payee cheque/draft or use of electronic clearing system, the payment so made shall be deemed to be the profits and gains of business or profession, if the payment or aggregate of payments made to a person in a day, exceeds Ten thousand rupees.

5. - Provided further that in the case of payment made for plying, hiring or leasing goods carriages, the provisions of sub-sections (3) and (3A) shall be effective if payment exceeds "thirty-five thousand rupees“.

6. Exception 40A(3) and (3A) – Rule 6DDNo disallowance under 40A (3) and (3A) shall be made in the following circumstances, (a) where the payment is made to RBI, any banking company, State Bank of India or any subsidiary bank, any co-operative bank or land mortgage bank, any primary agricultural credit society or any primary credit society, the Life Insurance Corporation of India.(b) where the payment is made to the Government.(c) where the payment is made by any LC, RTGS, NEFT, ECS, Bills of Exchange, Credit Card or Debit Card.(d) where the payment is made by way of adjustment against the amount of any liability incurred by the payee for any goods supplied or services rendered by the assessee to such payee.

7. (e) where the payment is made for the purchase of agricultural, forest produce, Produce of animal husbandry (including livestock, meat, hides and skins) or dairy or poultry farming or fish or fish products or the products of horticulture or apiculture to the cultivator, grower or producer of such articles.(f) where the payment is made for the purchase of the products manufactured or processed without the aid of power in a cottage industry, to the producer of such products;(g) where the payment is made in a village or town, which on the date of such payment is not served by any bank, to any person who ordinarily resides, or is carrying on any business, profession in any such village or town;

8. (h) Payment made to an employee or the legal heir of any such employee on retirement, retrenchment, resignation, discharge or death of such employee, on account of gratuity, retrenchment compensation or similar terminal benefit and the aggregate of such sums payable to the employee or his heir does not exceed fifty thousand rupees.(i) Salary to employee after deducting TDS and when such employee is temporarily posted for a continuous period of fifteen days or more in a place other than his normal place of duty or on a ship and does not maintain any account in any bank at such place or ship.(j) where the payment was required to be made on a day on which the banks were closed either on account of holiday or strike.

9. (k) where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person.(l) where the payment is made by an authorised dealer or a money changer against purchase of foreign currency or travellers cheques in the normal course of his business.

10. Payment for Fixed AssetsProviso 2 to Section 43(1)Provided further that where the assessee incurs any expenditure for acquisition of any asset or part thereof in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee Cheque or Draft or use of electronic clearing system through a bank account, exceeds ten thousand rupees, such expenditure shall be ignored for the purposes of determination of actual cost.

11. Cash Payment 269TNo person shall repay any loan or deposit or any Specified Advance otherwise than by an account payee cheque or draft or by use of electronic clearing system through a bank account if the aggregate amount of the loans, deposits or advances alongwith interest is twenty thousand rupees or more:

12. “Specified Advance" means any sum of money in the nature of advance, by whatever name called, in relation to transfer of an immovable property, whether or not the transfer takes place.

13. Exception to Section 269TProvided further that nothing contained in this section shall apply to repayment of any loan or deposit or advance taken or accepted fromGovernment, any banking company, post office savings bank, co-operative bank, any corporation established by a Central, State or Provincial Act, any Government company.

14. Penalty271E. If a person repaid any loan or deposit or specified sum in contravention of the provisions of section 269T, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so repaid.

15. Section 80G (5D)No deduction shall be allowed under this section in respect of donation of any sum exceeding Two thousand rupees unless such sum is paid by any mode other than cash.

16. Cash ReceivedSection 269SSNo person shall take/ accept any loan, deposit or any specified sum, otherwise than by an account payee cheque, draft or use of electronic clearing system, if,—the amount or the aggregate amount of such loan, deposit and specified sum; oron the date of taking/ accepting such loan or deposit or specified sum, any loan or deposit or specified sum taken or accepted earlier is remaining unpaid, the amount or the aggregate amount remaining unpaid; orthe amount or the aggregate amount referred to in clause (a) together with the amount referred to in clause (b),is twenty thousand rupees or more:

17. “Specified sum" means any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place.w.e.f. 01.06.2015

18. Exception to Section 269SSProvided further that nothing contained in this section shall apply to Accepting or Taking of any loan or deposit or advance taken or accepted byGovernment, any banking company, post office savings bank, co-operative bank, any corporation established by a Central, State or Provincial Act, any Government company.

19. Provided further that the provisions of this section shall not apply to any loan or deposit or specified sum, where the person from whom the loan or deposit or specified sum is taken or accepted and the person by whom the loan or deposit or specified sum is taken or accepted, are both having agricultural income and neither of them has any income chargeable to tax under this Act.

20. Penalty271D. If a person takes or accepts any loan or deposit or specified sum in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so taken or accepted.

21. Section 269STNo person shall receive an amount of two lakh rupees or more— (a) in aggregate from a person in a day; (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 Draft or use of electronic clearing system through a bank account.

22. ExceptionThis section not apply to (a) Government; (b) any banking company, post office savings bank or co- operative bank; (c) transactions of the nature referred to in section 269SS;Penalty271DA. If a person receives any sum in contravention of the provisions of section 269ST, he shall be liable to pay, by way of penalty, a sum equal to the amount of such receipt:

23. ExampleA sold goods to Mr. B of Rs. 10,00,000 dated 01-04-2017. Mr. B made the payment as follows: a) 2,00,000 vide RTGS on 03-04-2017 b) 1,50,000 cash payment on 05-04-2017 c) 1,90,000 vide bearer cheque on 07-04-2017 d) 4,60,000 by account payee cheque on 11-04-2017Mr. A has received the payment of Rs. 3,40,000 (1,50,000 [cash]+1,90,000[bearer cheque]). It is covered by section 269ST even if cash payment/bearer cheque payment in a single day is less than Rs. 2,00,000. The AO can impose the 100% penalty of Rs. 3,40,000 under section 271DA.Mr. A received the payment exceeding Rs. 2,00,000 related to invoice no 1/2017-18, he is required to report this transaction in Form 61A ( Section 285BA), provided Mr. A is subject to tax audit.

24. AIR Reporting – SFT (Section 285BA)Any person who is responsible to registering or maintaining Books of Accounts relating to the Specified Financial Transaction as prescribed in Rule 114E shall report such Specified Financial Transaction (SFT) to the Income Tax Authority as may be prescribed.The Statement referred above shall be furnished for such period, with in such time, form and manner as prescribed.

25. (5) Where a person who is required to furnish a statement under sub-section (1) has not furnished the same within the specified time, the prescribed income-tax authority may serve upon such person a notice requiring him to furnish such statement within a period not exceeding thirty days from the date of service of such notice and he shall furnish the statement within the time specified in the notice.

26. Rule 114E114E. The statement of financial transaction (SFT) required to be furnished under sub-section (1) of section 285BA of the Act in respect of a financial year shall be furnished in Form No. 61A and shall be verified in the manner indicated therein. - The statement referred above shall be furnished by every person mentioned in column (3) in respect of transactions specified in column (2) of the given Table w.e.f. 01.04.2016.- The date of Furnishing the Form 61A is 31st May of the Next Financial Year, (However same has been extended to 30th June 2017 for the Financial Year 16-17)

27. Penalty 271FA If a person who is required to file SFT fails to file the same within perscribed times, the AO may direct that such person shall pay a sum of Rs 100/- per day during which failure continues: Provided further where such person fails to furnish the statement as required in sub section (5) of 285BA, he shall pay by way of penalty, a sum of Rs 500/- Per day during which failure continues:Penalty 271FAA If a person who is required to file SFT, furnish inaccurate information or does not rectify the mistakes or inform the department regarding inaccuracy, the AO may direct such person shall pay, by way of penalty of Rs 50000/-

28. Sl. No.Nature and value of transactionClass of person (reporting person)(1)(2)(3)1. Payment made in cash for purchase of bank drafts or pay orders or banker's cheque of an amount aggregating to ten lakh rupees or more in a financial year.Cash deposits or cash withdrawals aggregating to fifty lakh rupees or more in a financial year, from current account.A banking company, co-operative bank2. Cash deposits aggregating to ten lakh rupees or more in a financial year, in other than a current account and time deposit. A banking company or a co-operative bank or Post Master General as referred the Indian Post Office Act, 3. One or more time deposits (other than renewal) of a person aggregating to ten lakh rupees or more in a financial year. A banking company or a co-operative or Post Master General as referred the Indian Post Office Act, Nidhi Companies, NBFCs

29. Sl. No.Nature and value of transactionClass of person (reporting person)(1)(2)(3)4. Payments made by any person of an amount aggregating to— (i) one lakh rupees or more in cash; or(ii) ten lakh rupees or more by any other mode, Against credit cards in a financial year.A banking company or a co-operative or any other company or institution issuing credit card. 5. Receipt of an amount aggregating to ten lakh rupees or more in a financial year for acquiring bonds or debentures issued by the company or institutionA company or institution issuing bonds or debentures. 6. Receipt of an amount aggregating to ten lakh rupees or more in a financial year for acquiring shares (including share application money) issued by the company. A company issuing shares.

30. Sl. No.Nature and value of transactionClass of person (reporting person)(1)(2)(3)7. Buy back of shares for an amount aggregating to ten lakh rupees or more in a financial year. A company listed on a recognised stock exchange.8. Receipt of an amount aggregating to ten lakh rupees or more in a financial year for Mutual Fund (other than Switch Over). A trustee of a Mutual Fund or such other person managing the affairs of the Mutual Fund.9. Receipt from any person for sale of foreign currency including foreign exchange debit or credit card or travellers cheque or draft of an amount aggregating to ten lakh rupees or more during a financial year. Authorised person as referred in Foreign Exchange Management Act, 10. Purchase or sale by any person of immovable property for an amount of thirty lakh rupees or more.Registrar or Sub-Registrar.

31. Sl. No.Nature and value of transactionClass of person (reporting person)(1)(2)(3)11. Receipt of cash payment exceeding two lakh rupees for sale, of goods or services of any nature by any personAny person who is liable for audit under section 44AB of the Act. 12. Cash deposits during the period 09th November, 2016 to 30th December, 2016 aggregating to twelve lakh fifty thousand rupees or more.A banking company or a co-operative bank or Post Master General as referred in Indian Post Office Act, 13. Cash deposits during the period 1st of April, 2016 to 9th November, 2016 in respect of accounts that are reportable under Sl.No.12. A banking company or a co-operative bank or Post Master General as referred in Indian Post Office Act,

32. Rule 114 (3)The reporting person mentioned in column no.3 (other that the person mentioned in serial no. 10 and 11) shall, while aggregating the amount for determining the threshold amount for reporting shallTake into account all the accounts of the same nature as specified in the said table of that person during the financial year.

33. Press ReleasePress Information Bureau Government of IndiaMinistry of Finance26-May-2017 12:21 IST Central Board of Direct Taxes (CBDT) Issues Clarification on furnishing Statement of Financial Transaction (SFT) & SFT Preliminary Response Section 285BA of the Income-tax Act, 1961 requires furnishing of a Statement of Financial Transaction (SFT) for transactions prescribed under Rule 114E of the Income-tax Rules, 1962. The due date for filing such SFT in Form 61A is 31st May 2017. In case there are reportable transactions for the year, the reporting person/entity is required to register with the Income Tax Department and generate Income Tax Department Reporting Entity Identification Number (ITDREIN).

34. The same can be generated by logging-in to the e-filing website (https://incometaxindiaefiling.gov.in/) with the login ID used for the purpose of filing the Income Tax Return of the reporting person / entity. Entity having PAN can take only PAN based ITDREIN. Entity having TAN can generate an ITDREIN only when such TAN's Organisational PAN is not available.The registration of reporting person (ITDREIN registration) is mandatory only when at least one of the Transaction Type is reportable. A functionality "SFT Preliminary Response" has been provided on the e-Filing portal for the reporting persons to indicate that a specified transaction type is not reportable for the year.

35. Detailed procedure of ITDREIN registration and upload of Form 61A is available under the “Help” section and Form 61A utility and Schema are available under the download section of http://www.incometaxindiaefiling.gov.in and https://www.cleanmoney.gov.in. Online filing of form 61A requires a valid class 2 or 3 digital signature certificate of person responsible for filing the same. Please refer “DSC Management Utility” manual under help section on how to generate the signature file, attaching the XML with signature and uploading of XML with signature file in e-Filing portal.

36. Quoting of PAN No. (Rule 114B)114B. Every person shall quote his permanent account number in all documents pertaining to the transactions specified in the Table below, namelyProvided that where a person, is a minor he shall quote the permanent account number of his father or mother or guardian, Provided further that any person who does not have a permanent account number, he shall make a declaration in Form No.60 giving therein the particulars of such transaction.Provided also that the provisions of this rule shall not apply to the Central Government, the State Governments and the Consular OfficesOr the non-residents referred other than a transaction referred to at Sl. No. 1,2,4,7,8,10,12,14,15,16,17 of the Table:

37. Sl.No. Nature of transaction Value of transaction (1) (2) (3) 1. Sale or purchase of a motor vehicleAll such transactions. 2. Opening an account [other than a FD and SB] with a banking company or a co-operative bankAll such transactions. 3. Making an application to any banking company or a co-operative bank or to any other company or institution, for issue of a credit or debit card. All such transactions. 4. Opening of a demat accountAll such transactions. 5. Payment to a hotel or restaurant against a bill or bills at any one time. Payment in cash of an amount exceeding fifty thousand rupees. 6. Payment for travel to any foreign country or payment for purchase of any foreign currency at any one time. Payment in cash of an amount exceeding fifty thousand rupees. 7. Payment for Mutual Fund units. Amount exceeding fifty thousand rupees.

38. Sl.No. Nature of transaction Value of transaction (1) (2) (3) 8. Payment to a company or an institution for acquiring debentures or bondsAmount exceeding fifty thousand rupees. 9. Payment to the Reserve Bank of India, for acquiring bondsAmount exceeding fifty thousand rupees. 10.Deposit With banking company or a co-operative bank including any bank or banking institution or Post OfficeAmount exceeding fifty thousand rupees during any one day; or 11. Purchase of bank drafts or pay orders or banker's chequesPayment in cash for an amount exceeding fifty thousand rupees during any one day. 12. A time deposit with a banking company or a co-operative bank including any bank or banking institution, or a Post Office or Nidhie Companies or NBFCsAmount exceeding fifty thousand rupees or aggregating to more than five lakh rupees during a financial year.

39. Sl.No. Nature of transaction Value of transaction (1) (2) (3) 13. Payment for one or more pre-paid payment instruments, to a banking company or a co-operativePayment in cash or bank draft of an amount aggregating to more than fifty thousand rupees in a financial year. 14. Payment as life insurance premiumAmount aggregating to more than fifty thousand rupees in a financial year. 15. A contract for sale or purchase of securities (other than shares)Amount exceeding one lakh rupees per transaction. 16. Sale or purchase, by any person, of shares of a company not listed in a recognised stock exchange. Amount exceeding one lakh rupees per transaction. 17. Sale or purchase of any immovable property. Amount exceeding ten lakh rupees or More18. Sale or purchase, by any person, of goods or services of any nature other 1 to 17Amount exceeding two lakh rupees per transaction:

40. Penalty272B. If a person fails to comply the provisions of section 139A or a person fails to give his PAN No. Or gives false PAN No., than the AO may direct that such person shall be liable to pay, by way of penalty, a sum of Rs 10000/-

41. 206(1F) Every person, being a seller, who receives any amount as consideration for sale of a motor vehicle of the value exceeding ten lakh rupees, shall, at the time of receipt of such amount, collect from the buyer, a sum equal to one per cent of the sale consideration as income-tax.]

42. Thank Youfor your Attention