New Delhi: Ban on cash transaction in excess of Rs 2 lakh will not be applicable to withdrawals from banks and post office savings accounts, the income tax department said on Wednesday.
Through the Finance Act 2017, the government has banned cash transactions of over Rs 2 lakh and said a penalty of an equal amount would be levied on the receiver.
In a clarification on the newly inserted Section -- 269ST -- in the I-T Act, the Central Board of Direct Taxes (CBDT) said the restriction shall not apply to withdrawal from banks and post offices.
"It has also been decided that the restriction on cash transaction shall not apply to withdrawal of cash from a bank, co-operative bank or a post office savings bank," the statement said.
It said necessary notification in this regard would be issued.
In the 2017-18 Budget, Finance Minister Arun Jaitley had proposed to ban cash transaction of over Rs 3 lakh. This limit was lowered to Rs 2 lakh as an amendment to the Finance Bill, which was passed by the Lok Sabha last month.