New Delhi sources have made a statement that currently restrictions on cash dealings of Rs 2 lakh or more will not apply to credit card bill payments, business correspondents appointed by banks and issuers of prepaid instruments, and the Finance Act 2017 banned cash transaction of Rs 2 lakh or above with effect April 1, 2017. However, some exceptions were made.
It was stated that through a notification, the Income Tax Department has exempted five entities from the purview of this Section, which includes receipts by a business correspondent on behalf of a banking company or co-operative bank; and receipt by a company or institution issuing credit cards against bills raised in respect of one or more credit cards.
Meanwhile receipt from an agent by an issuer of pre-paid payment
instruments, receipt by a white label ATM operator from retail outlet and
receipt which is not includible in the total income under clause (17A) of
section 10 of the I-T Act, 1961, have been excluded from the purview of
Sec269ST and furthermore a move to ban cash transaction above a threshold was
aimed at curbing black money by discouraging cash transaction and promoting
digital economy.
