CASH TRANSACTIONS LIMIT

SECTION 269ST

Any Person , shall not receive amount of Rs 2 Lacs or more as the new cash transactions limit provisions of Income Tax Act :

• In aggregate from a person in a day OR

• In respect of Single Transaction. OR

• In respect of transactions relating to single event or occasion from a person.

NON APPLICABILITY OF SECTION 269ST

The new cash transactions limit is not applicable in the following cases :

• if person received the amount through A/c Payee cheque or Bank Draft or Electronic Mode.

• Receipt by Government.

• Receipt by Banking Co, post office savings bank or co-operative banks.

• Transaction covered U/s 269SS.

The new Cash Transactions Limit is applicable on receiver and not the payer. Thus , if default is done receiver will be liable to pay penalty as the provisions of Income Tax Act.

PENALTY U/S 271DA

The amount of penalty will be equal to the amount of such receipt as per the Section 269ST and will be levied on the receiver of such sum.

Read Also : Recovery In GST

Read Also : New Provisions in GST

Example of Section 269ST

In Aggregate in a single Day from a Person

• If Mr Krishna buys goods worth Rs 2 Lacs from Mr Nandu and Pays Rs 2 Lacs in 5 installments in a single day to the Nandu – Section 269ST applicable on Mr Nandu – Received 2 Lacs in aggregate from a person in a day.

In respect of single transaction

• If Mr Krishna buys goods worth Rs 2 Lacs from Mr Nandu and pays Rs 2 Lacs in 5 installments in different dates – Section 269ST applicable on Mr Nandu – Received 2lacs in respect of single transaction.

In respect of single event or occasion

• If Mr Krishna received on his marriage occasion cash gift amounting to Rs 3 Lacs , even if each amount is less than 2 Lacs . Section 29ST applicable as amount received in respect of transaction related to single event or occasion

MISCELLANEOUS POINTS

• Penalty would be levied even if the defaulter does not have PAN.

• No restrictions of receiving amount in cash as per the GST Laws.

• Bearer cheques and self cheques will also be considered as cash for the purpose of this provision .

• Purpose is not relevant for this provision. It will be applicable even if amount if received for personal Purpose and not for business purpose.