EVERY PERSON MUST KNOW CASH TRANSACTION LIMIT



Section 269ST of Income Tax Act 1961 -  A  person can not accept  in aggregate cash of Rs 200,000 or more in a day in respect of single transaction or in respect of transaction relating to one Event or Occasion.
In case of violation of section 269ST penalty will be levy under section 271DA to the recipient
Penalty Amount is Rs 100 % of violation amount
    Example –
       a)    if a person doing following transactions in a single day
              Transaction 1 – 50,000
              Transaction 2 – 50,000
              Transaction 3 – 50.000
              Transaction 4 -  50,000
              Transaction 5 – 50,000
     Total cash in a day Rs 2,50,000 . it is more than Rs 200,000 hense penalty will be levy
      on these transaction is Rs 2,50,000 as per section 271 DA to the recipient .

c) If a person sale a vehicle to another person amount of Rs 3,00,000 and paid this amount in 30 instalment in cash .
Cash transaction   30,000 * 30 =  3,00,000
It is violation of section 269ST and here penalty will be of Rs 3,00,000 to the recipient . 
                 
d) On the occasion of Marriage if a person received as a gift of Rs 2,50,000 in cash (even if received by relative ) it will be violation of section 269ST .
Penalty will be of Rs  2,50,000 to the recipient

This section is applicable to all individual and non-individual
Following person shall be exempt under this section
i) Government
ii) Banking Company
iii) Post office saving Bank
iv) Co-operative bank
v) If any transaction applicable under section 269SS



2) Section 269SS of Income Tax Act 1961- if a person accept or receive   loan amount of Rs 20,000 or more (cash) in respect of single transaction or accumulated transactions or in respect of sale of immovable property then recipient  shall be liable of penalty.
Penalty will be equal amount of violation amount 
Example-
     If a person has borrowed in cash  
         Old loan (cash )  -   5,000
         New loan (cash)  -   18,000
         Total                        23,000   it is more than 20,000 this is violation of section 269 SS and 
penalty will amount of Rs  18,000
Following person shall be exempt under this section 
i) Government 
ii) Banking Company
iii) Post office saving Bank
iv) Co-operative bank 
v) Corporation Estd. by central, State or Provisional Act 
vi) Government Company 
vii) Person notified by the Central Government 

3) Section 269 ST of Income Tax Act 1961- if a person paid  cash amount of Rs 20,000 or more in respect of repayment of loan then that shall be liable for penalty .
Penalty will be equal amount of violation amount. 

Following person shall be exempt under this section 
i) Government 
ii) Banking Company
iii) Post office saving Bank
iv) Co-operative bank 
v) Corporation Estd. by central, State or Provisional Act 
vi) Government Company 
vii) Person notified by the Central Government 


4) Section 40A(3) of Income Tax Act 1961 – if a person paid cash amount of Rs 10,000 or more in respect of expenditure relating to business and profession in a day then expense will be disallowed and this amount will be added to income also.
In case of transport contractor daily cash limit of Rs 35,000.

5) Section 32 of Income Tax Act 1961-  if a person purchase a Depreciable Asset amount of Rs 10,000 or more ( cash)  in a day, then depreciation will not be allowed .

6) Section 13 A (i) of Income Tax Act 1961- if a person donate more than Rs 2,000 in cash to a registered trust or political party then this amount will be disallowed

Author 
CA Pooja Shukla FCA
RYPS & ASSOCIATES LLP
Website:www.ryps.in
Contact No: 9810505547



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