India Makes Cash Transactions Reporting Mandatory

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New Delhi (ABC Live): Cash Transactions Reporting : Reporting Cash Transactions under Rule 114 E of Income Tax Rules, 1962 Rule 114-E of Income-Tax Rules, 1962 for furnishing Statement of Financial Transactions (SFT) came into force with effect from 1st April, 2016.

Any person who is liable for audit under section 44AB of the Income-Tax Act, 1961 is required to furnish a statement in respect of transaction at serial no. 11 of Rule 114E(2) relating to receipt of cash payment exceeding Rupees 2,00,000/- (Rupees Two Lakh) for sale of goods or service. Doubts were raised if such transactions are required to be aggregated for reporting.

The norms of aggregation contained in sub-rule 3 of Rule 114E have been amended vide CBDT’s Notification No. 91/2016 dated 6th October, 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.

Cash Transaction Reports

The Prevention of Money-laundering Act, 2002, and rule thereunder require every reporting entity to furnish to FIU-IND information relating to –

All cash transactions of the value of more than rupees ten lakhs or its equivalent in foreign currency;

All series of cash transactions integrally connected to each other which have been individually valued below rupees ten lakh or its equivalent in foreign currency where such series of transactions have taken place within a month and the monthly aggregate exceeds an amount of ten lakh rupees or its equivalent in foreign currency.