ITO Section 114C

Restriction on economic transactions by certain persons.

(1) Notwithstanding anything contained in any law for the time being in force, 

• (a) any application, by any ineligible person, for booking, purchase or registration of a motor vehicle of the value exceeding the threshold given in Fifteenth Schedule, shall not be accepted or processed by any manufacturer of a motor vehicle or vehicle registering authority of Excise and Taxation Department, as the case may be;
• (b) any application or request by any ineligible person, to any authority responsible for registering, recording or attesting transfer of any immovable property, of the value exceeding the threshold given in Fifteenth Schedule, shall not be accepted or processed by such authority;
• (c) Any person authorized to open and maintain an account in respect of securities, units of mutual fund or similar investment, shall not open an account or maintain such account if the total investment by an ineligible person in any such account exceeds the threshold specified in Fifteenth Schedule; and
• (d) a banking company shall not allow cash withdrawal from any of the bank account of any person, exceeding the threshold as specified in Fifteenth Schedule.

(2) The provisions of sub-section (1), shall not apply on transactions made by a non-resident person or a public company except that mentioned in clause (d) of sub-section (1).

(3) The sources of investment and expenditure statement filed by the person and sufficient resources mentioned in sub-section (5), shall not be construed as nature and source of income for the purposes of section 111.

(4) For the purposes of this section, –

(a) “eligible person” shall mean a person who has filed –

• (i) a return of income for the tax year immediately preceding the year of transaction mentioned in sub-section (1) and has sufficient resources in the wealth statement in case of an individual, or financial statement in case of a company or an association of persons, as the case may be, for such transaction; or
• (ii) sources of investment and expenditure statement declaring sufficient resources and furnishing explanation thereof for a particular purchase or investment transaction covered in clauses (a), (b) and (c) of subsection (1) 

Provided that in case of an individual, the eligible person shall  include his immediate family members.;

• (b) “immediate family members” in respect of an individual, shall include his parents, spouse and dependent children;
• (c) “ineligible person” shall mean a person who is not an eligible person as defined in clause (a) of this sub-section;
• (d) “sources of investment and expenditure statement” shall mean a declaration by a person filed on the Board‘s web portal, specifying the sources of funds for making such transaction; and
• (e) ”sufficient resources” shall mean one hundred and thirty percent of the cash and equivalent assets comprising cash denominated in local or foreign currency, fair market value of gold, net realizable value of stocks, bonds, receivables or any other cash equivalent asset as may be prescribed, declared by a person either in his sources of investment and expenditure statement, or wealth statement filed for the latest tax year and in the case of a company or association of persons, cash and equivalent assets, declared in the financial statements attached with the income tax return for the latest tax year:

Provided that where an asset mentioned in sub-section (1), other than clause (d) of this sub-section, has been purchased by way of exchange of capital assets already declared in the wealth statement, or financial statement, or sources of investment and expenditure statement, the disposal of such capital assets shall be treated to be part of cash equivalent assets to the extent of the value mentioned in the agreement.

(5) All or any of the restrictions or limitations imposed on the ineligible person under this section shall come into force on such date as the Federal Government may, by notification in official Gazette, appoint with such reductions and enhancements in the thresholds specified in the Fifteenth Schedule as deemed appropriate.]