Businesses and
traders are required to report any single transaction of cash above Rs 2 lakh
for sale of goods and services to the income tax department.
The clarification on the reporting
guidelines rule 114E of Income Tax Rules, 1962, which came into force from
April this year, amid doubts expressed in certain quarters about reporting of
cash transactions that aggregate to Rs 2 lakh.
"The norms of aggregation
contained in sub-rule 3 of Rule 114E have been amended vide CBDT notification
dated October 6, 2016, clearly indicating that the said transactions did not
require aggregation and the reporting requirement under SFT for this purpose is
on receipt of cash payment exceeding rupees two lakh for sale of goods or
services per transaction," the CBDT said in a statement.
Rule 114E of Income-Tax Rules, 1962,
for furnishing Statement of Financial Transactions (SFT) came into force with
effect from April 1, 2016, under which a person is required to furnish a
statement in respect of transaction relating to receipt of cash payment exceeding
Rs 2 lakh for sale of goods or service.
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