Provisions of section 269ST of Income-tax Act,1961 relaxed: Hospitals, Medical facilities, dispensary etc providing Covid treatment to patients allowed to accept cash payments of Rs.2 lakh or more.

Relaxation has been granted for the period 01.04.2021 to 31.05.2021, after obtaining PAN or AADHAAR of patient & the payer.

1. PAN or Adhar of the patient and the payee is obtained by the Hospital, focus care center, etc.

2. The amount of receipt is in between 1st April 2021 to 31st May 2021.

The provision of section 269ST which places restriction on receipt  of Rs. 2 Lakh or more in cash is reproduced hereunder for the benefit of the readers:

269ST- No person shall receive an amount of two lakh rupees or more—

(a) in aggregate from a person in a day; or

(b) in respect of a single transaction; or

(c) in respect of transactions relating to one event or occasion from a person,

otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account:

Provided that the provisions of this section shall not apply to—

(i) any receipt by—

(a) Government;

(b) any banking company, post office savings bank or co-operative bank;

(ii) transactions of the nature referred to in section 269SS;

(iii) such other persons or class of persons or receipts, which the Central Government may, by notification in the Official Gazette, specify.

Explanation.—For the purposes of this section,—

(a) “banking company” shall have the same meaning as assigned to it in clause (i) of the Explanation to section 269SS;

(b) “co-operative bank” shall have the same meaning as assigned to it in clause (ii) of the Explanation to section 269SS.’.

Section 269ST is a step to promote less cash economy & restricts the cash transactions in excess of Rs. 2 Lakh from a person in a single day or in respect of any single transaction or in respect of transactions relating to one event or occasion from any person.  The way the section has been drafted, outcome would be very stringent, at least till the time government provides certain genuine exclusion by notification. Even genuine Transactions in Cash would be affected by Section 269ST.

The above notification is issued pursuant to the power given to the CBDT inder clause (iii) above.