Pay 100% penalty for cash transactions over Rs 3 lakh

Clarifying the punishment on cash transactions of over Rs 3,00,000 as mentioned in the Union Budget 2017, Chairman of the Central Board of Direct Taxation, Sushil Chandra said that anyone found guilty of the crime would be liable to pay a penalty of 100%; the complete transaction amount. The CBDT chairman further said that they were in the process of gathering information from all the stakeholders and would give an exhaustive list as to in what situations the Section 10(38) “anti-abuse” provision of levying long-term capital gains tax on share transfer in unlisted companies would not be applicable. He further said that it was an anti-abuse law that has been created and would be used.

Earlier during the presentation of the Union Budget 2017, Finance Minister Arun Jaitley, had proposed 10% long term capital gains on those entities, who acquire shares in unlisted companies after October 1, 2004, given that they had not paid the STT during the purchase. The CBDT chairman said that the genuine investors in IPO should not worry as there would be no policy change in matters of capital gains.

Chandra told the media that of the 15 lakh companies incorporated under the Ministry of Corporate Affairs, only 6 lakh filed their Income Tax Returns. He further said that only 2.5 lakh companies of this 6 lkh showed their losses or zero incomes and 2.85 lakh companies just disclose income of less than Rs 1 crore. He concluded that the government’s aim was to make sure that everybody was tax complaint and the biggest challenge was how to make it happen.