In the nutshell it can be safely concluded that newly inserted section 269ST seeks to restrict wide amplitude of transactions in cash. It places restriction on cash received by a person amounting to Rs. 2 Lakhs or more. The restriction is on the payee and not on the payer, so it is the payee who will invite penalty u/s 271D for any violation of section 269ST. The section includes within its sweep all cash receipts of whatever nature such as cash sales, cash gifts, donations made in cash, compensation, encashment of securities/instruments etc. A penalty equal to the amount of such receipt shall be imposed u/s 271D. It has also been provided that penalty shall not be imposable if such person proves that there were good and sufficient reasons for the contravention. What will constitute good and sufficient reasons for contravention have not been defined. Perhaps this needs some clarification or suitable amendment in section 271D so as to bring out clearly what all reasons are covered under the expression good and sufficient reasons. It also remains to be seen how the information regarding cash receipts in contravention of section 269ST shall come into the knowledge of the department.
In short, the provisions of section 269ST will affect every walk of life in view of its wide amplitude.
Now with the advent of this new provision, such cash gifts must be below Rs. 2 Lakhs as it will fall under third category being related to single event or transaction, even if the payer is a relative.