Supreme Court Ruling on Cash Transactions Involving ₹2 Lakh or More

The Supreme Court has issued a directive requiring courts to inform jurisdictional income tax authorities if cases before them involve cash transactions of ₹2 lakh or more.

Key Directives

• Courts must notify tax authorities about any case involving cash transactions of ₹2 lakh or more.
• Sub-registrars are required to report cash payments of ₹2 lakh or more in property registration documents to the income tax department.

Implications for Income Tax Authorities

• Upon notification, the income tax department must investigate the legality of the cash transaction.
• Transactions violating Section 269ST, which restricts cash receipts of ₹2 lakh or more, will be scrutinized.

Legal Consequences

• Section 271DA mandates penalties equal to the cash amount received in violations.
• The ruling aims to deter large cash transactions and promote a digital, transparent economy.

Broader Economic Context

• The government supports cashless transactions through digital payment initiatives and tax measures.
• The Supreme Court's ruling aligns with legislative efforts promoting a cashless economy.

Judicial and Administrative Compliance

• Failure to report eligible transactions by registration authorities will result in disciplinary actions.
• Judgment copies sent to relevant authorities for compliance and enforcement.