Anyone transacting in cash above the newly imposed limit of Rs 3 lakh will have to pay a penalty of a similar amount, according to a top government official.

Finance Minister Arun Jaitley announced in his budget speech that on the recommendation of the Special Investigation Team (SIT) on Black Money, the government had decided not to allow cash transactions above Rs 3 lakh.

Any individual or firm which pays anyone over this amount will have to pay a 100 per cent penalty of the amount which exceeds this limit, according to Revenue Secretary Hasmukh Adhia.
 

Adhia told CNBC TV18 that apart from the penalty, the expenditure would not be permitted under the Income Tax for companies making such a transaction above the limit.