No cash payment above Rs 10000, Modi will finish black money

New Delhi, Feb 1: In order to control the cash economy and increase Tax Deduction at Source (TDS) compliance, Union Finance Minister Arun Jaitley on Thursday proposed to impose restriction on entities incurring expenditure in cash without paying tax.

Presenting the General Budget 2018-19 in Parliament here, the Finance Minister said, “Currently, the income of trusts and institutions is exempt if they utilise their income towards their objects in accordance with the relevant provisions of the Income-tax Act. However, there is no restriction on these entities for incurring expenditure in cash. In order to have audit trail of the expenses incurred by these entities, it is proposed that payments exceeding Rs 10,000 in cash made by such entities shall be disallowed and the same shall be subject to tax. ” Further, in order to improve TDS compliance by these entities, the Finance Minister proposed to provide that in case of non-deduction of tax, 30 per cent of the amount shall be disallowed and the same shall be taxed.