In Budget 2017-18, a ban on cash transaction of more than Rs 3 lakh has been proposed. The same has been mentioned in the Finance Bill 2017. But, the Govt of India has made amendment in Finance bill and has reduced the Cash transaction limit to Rs 2 Lakh.
This amendment has been passed through Finance Act, 2017 and notified on 31-March-2017. Complete details on Rs 2 Lakh Cash Transaction limit have been provided in a new section referred to as ‘Section 269ST‘.
As per Section 269ST, any person who enters into a transaction of Rs 2 Lakh or above in cash, will be liable to a penalty of an amount equivalent to the amount of transaction.
For example : If you buy an expensive watch for cash worth Rs 5 Lakh, it is the shopkeeper who will have to pay the tax (penalty) of Rs 5 Lakh. So, here the tax rate is 100%.
Though this new section on Cash Transaction limit sounds simple, we need to go through it in details, as I believe that this may have quite an impact on our daily financial lives.
What does Section 269ST say?
With effective from 1st April, 2017, no person shall receive an amount of Rs 2 Lakh or more;
(A) in aggregate from a person in a day (or)
(B) in respect of a single transaction (or)
(C) in respect of transactions relating to one event or occasion from a person.
The new Cash transaction limit is not applicable, if a person receives the amount through an Account Payee Cheque (or) an Account Payee Bank Draft (or) through use of electronic clearing system through a bank account. (Looks like, any receipts done through e-Wallets like Paytm, credit cards etc., may also be hit by this new amendment, need more clarity though.)
Kindly note that Penalty u/s 271DA will be imposed on a person who receives a sum of Rs 2 Lakh and above in cash. The extent of penalty will be a sum equal to the amount of such receipt. The said penalty shall however not be levied if the person proves that there were good and sufficient reasons for such contravention.
Section 269ST & Rs 2 Lakh Cash Transaction Limit – Examples
Let us understand the above three points with examples;
A. Single Person : Cash Receipt of Rs 2 lakh or more, from a single person in a day is not allowed even if the amount has been paid through multiple transactions during the day which are below Rs 2 lakh.
For example : Mr Virat buys a gold chain worth Rs 2 Lakh and pays the amount by cash to Mr Sonesh on a single day in 4 equal installments of Rs 50,000 each. As Mr Sonesh accepted cash worth Rs 2 Lakh from a single person and in a single day, section 269ST is applicable in this case. Sonesh has to pay a penalty of Rs 2 Lakh.
B. Single Transaction : Cash receipts of Rs 2 Lakh or more which are related to a single transaction are prohibited.
For example : Mr Kejriwal goes through a medical surgery and the hospital charges him a bill of Rs 4 Lakh. Kejriwal clears the bill in 4 installments of Rs 1 Lakh each on four different dates. Here, the cash receipts got by hospital are less than Rs 2 Lakh and have been received on different dates.
Whether this transaction violates section 269ST? – Yes. Hospital has to pay the penalty. Because, they received the payments with respect to single bill / transaction. So, splitting of payments over several days is prohibited.
C. Single Event / Occasion : Cash transactions or cash receipts related to a single event or occasion, can not be more than Rs 2 Lakh.
For example : Nagachaitanya gets married to Samantha. On their wedding occasion, their relatives gifted Cash amount worth Rs 10 Lakh on different dates. Even if we assume that each person has gifted cash worth less than Rs 2 Lakh, are these receipts come under the purview of Section 269ST? Is penalty applicable?
Yes, penalty can be levied. Here, marriage is a ‘single occasion’ and cash gifts worth Rs 2 Lakh or more can not be received from relatives and other persons.
Can I make Cash Deposit / Cash Withdrawal of more than Rs 2 Lakh from my Bank?
What if you would like to make cash withdrawal from your bank account or ATM an amount of Rs 2 Lakh or more in a single day? Yes, you will be liable to pay penalty of equal amount. For example, if you withdraw Rs 10 Lakh from Bank on a single day, you are liable to pay penalty of Rs 10 lakh irrespective of how you are going to use that amount.
So, Cash withdrawals of Rs 2 Lakh or more, from your Bank through your saving bank account, Current account, bank loan accounts like CC Limit, OD limits etc., are subject to penalty.
Latest Update (05-Apr-2017) : It has been decided by the Govt that the restriction on cash transaction shall not apply to withdrawal of cash from a bank, co-operative bank or a post office savings bank. Necessary notification in this regard is being issued.
What about Cash deposits at Bank? This can be a little tricky.. For example, if you deposit Rs 10 Lakh in a single day in your Bank account, it is then assumed that you have received cash receipts of more than Rs 2 Lakh and the same has been deposited into the banking system. If that is not the case, you may have to prove it otherwise, that you have received this amount from different persons on different dates..
Important Points
- Based on my interpretation of Section 269ST, payment modes like bearer cheque and self-cheque will also be considered on par with Cash based transactions only.
- It has been clearly stated that penalty (if any) is chargeable to an individual who violates section 269ST, even if you do not have PAN and/or is not a tax assessee.
- The restriction of receipt of money in Cash of Rs 2 Lakh or above in cash is applicable irrespective of whether it is for personal / business purpose, capital or revenue in nature, tax-free or taxable income.
- Kindly note that the payer of money is not liable to pay any penalty, it is the receiver of cash who has to bear the penalty u/s 271DA .
The main objective of the central Govt for implementing this amendment is to discourage payments by cash and curb black money menace to certain extent. Let’s hope that they provide more details / clarity on nitty-gritty of section 269ST & Rs 2 Lakh Cash Transaction limit.
Other Cash Related restrictions :
- Donations in cash exceeding Rs 2,000 are not permitted (Donations can be claimed u/s 80G)
- Premiums on Health insurance policies paid in cash can not be claimed u/s 80D
- Loans or Deposits can not be repaid in cash in excess of Rs 20,000 or more
- Payment of above Rs 10,000 per person, can not be made for any business payment towards any expenses (or) purchase of capital asset.
- One should not accept a loan or deposit or sale consideration of immovable assets in cash in excess of Rs. 20,000.
Continue reading:
- How Income Tax dept tracks the High Value Financial Transactions?
- Budget 2017-18 : 15 key Direct Tax proposals that you need to be aware of !
(Image courtesy of Stuart Miles at FreeDigitalPhotos.net) (Post first published on : 04-April-2017)
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eInsurance Policies & E-Insurance Account : IRDA’s latest Norms w.e.f 1st October, 2016
Dear Sree month,
What is the maximum limit to deposit cash in banks and will not attract any penalty under income tax act.
I want sold my one of flat , which I given developer ,to develop, now I want to sold 1 flat, can I accept 195000 amount by cash
dear sir
can i receives cash excess of 10000/- against sales in a day
Sir,
If i with draw 2 Lakh from saving bank accountpenalty is applicable
can i sell the goods 20000 in cash to a single person
Dear ashok ..Yes, you may do so..
I purchase a motor of rs. 13000 for my private limited company and i paid cash 13000/- against this bill. will you please advice me that it is correct or not.
Dear sachin ..I am not sure on this. You may kindly check with your CA / Auditor.
Dear Shri Sreekanth
I have given a loan on a registered mortgage for Rs.4 lakh on 20.04.2016 to a person. A sum of Rs.3 Lakh has been received back by cash on various dates from the person before February 2017. Now the party wants to settle balance Rs. 1 lakh and clear the mortgage. Can I receive the balance 1 lakh by cash and clear the mortgage. If I accept this please let me know whether this will attract penalty under 296ST?
Dear Velumani,
As the previous receipts are in FY 2016-17, I dont think Section 269ST is applicable for those three transactions.
Also, you have a valid documentary evidence of Loan.
So, I believe that it should be ok to receive Rs 1 lakh in cash. If possible, you may just try if you can get a Cheque.
Respected Sir,
i deposited 5 lakhs in my wife name through cheque from my account. is there any issue regarding this.. kindly clarify this sir.
with thanks,,
saravana
Dear saravana ..Cheque deposits does not come under the purview of Section 269ST.
Dear Sir,
I have received 5 lac by cash from rent of land.
what i do to deposit in bank?
Go through cash deposit by 5 transaction of 1 lac OR go through cheque?
Please guide me.
Dear priya,
Accepting cash above Rs 2 Lakh attracts penalty.
Suggest you to accept cheque only.
Is there any penalty for depositing 10,00,000 in my own bank account ?
Can a hospital receive Rs 15000 (Over 10000) as cash in a single day, from a single person or multiple relatives of the patient, for advance payment for hospitalization bill ? Patient is likely to stay for a week. I understand that such cash receipts should not be equal to or more than 2 lakhs during the patient’s hospital stay (single transaction/event)
Dear Sundararajan ..Can be a tricky issue. Advisable to avoid accepting Cash.
But if the total bill is less than Rs 2 Lakh, should be ok.
What about the “daily limit of Rs 10000 rule” ? Does it apply here or excluded, if so why ? Thanks a lot for the help
Dear Sundararajan ..
Any payment in cash above ten thousand rupees to a person in a day, shall not be allowed as deduction in computation of Income from “Profits and gains of business or profession”.
Kindly read this article ..click here..
You may kindly consult a Chartered Accountant.
Can a partner of a partnership FIRM withdraw cash from the FIRM, over 2 lakhs per annum ? Each withdrawal is less than 2 lakhs in a single day. Thanks a lot for your help
Dear Sundararajan ..There are no restrictions/penalty with regards to Cash withdrawals ..
Pardon me to ask you again. Are you sure if a partner can withdraw cash amounting to more than 2 lakhs in a year from partnership firm (not through banks) ? Does the rule not say “any person” and clarified as to include firm ? My doubt is: does the rule apply between a third party and a firm or between a partnership firm and its partners ?
.I sold my car for Cash and the amount was close to 8 lakhs ,
as the person bought the car borrowed same money from someone and he got it for cash. on 7th April
I had no idea about this rule and now i have his pan card and everything
I deposited the amount in my Bank
And i had 7 lakhs loan on that car which i paid off..
So now what can i do….I never had any info on this new rule
Dear Surya,
In case, you get a notice on this deposit, you may have to justify your stand..
Hi SreeKanth,
I want to transfer around 2,50,000 through NEFT to my wife account for closing a Personal loan. Will this subject to Penalty?
Thanks,
Kirubananthan
Dear Kirubananthan ..It wont be considered under Section 269ST.
Thanks SreeKanth
What about co-op credite Society.How Member Make Transacation inYear . And Limited of singal Transcation per day and In the F.Year.
Dear Raju ..I believe that the rules remain same as given in the article.
Dear Sreekanth,
can i deposit Rs 2 lakh to 3 lakh in my own bank account if not at a time,then by part deposit of RS 40 thousand to 50 thousand in a week.
kindly suggest as i would receive the said amount from my relative who do not have cheque facilty and wants to give me the amount in cash.
Dear RANA ..It should be ok, no issues..
Dear Sir
Please check the below two situations.
Situation 1
——————
I sell goods to a Dealer as below in three different Invoices on three different dates
April 2nd – 50000,
May 5th – 150000
June 10th – 80000
Total Sale – 280000
—
Cash received as below
Rs. 9500 x 29 days – (from July 1st to July 28th) and
Rs. 4500 on July 30th
Total Cash Received – 280000
So I sold the goods for Rs, 280000 and received the 280000 in small payments of Rs. below 10000 which is the per day limit by Govt. How the above rule applied in this case ?
———————
Situation 2
——————
I sell goods to a Dealer as below in three different Invoices on three different dates
April 2nd – 150000,
May 5th – 60000
Total Sale – 210000
I received the cash as – Rs. 9500 x 15 days (April 3rd to 17th) and Rs. 7500 on April 19th. So closed the first bill.
I received cash as as Rs.9500 x 6 days( May 6th to 11th) and Rs. 3000 on May 12th. So closed the second bill.
I sold goods worth Rs. 210000 and received cash against the bills in small payments, but I closed one bill before starting a new bill. How the above rule applied in this case ?
Kindly check the above situations too… Thanks in advance Sir.
Dear Arnab,
Are these related to a Single Transaction?
Dear Sir
I sell furniture to dealers. These are all different sales. They are all different transactions for us. Sales may be same products or different products. One Bill is one transaction for us and I think its the way normally sales treated. So for your question my answer is NO.
But I’m not sure how the Govt will treat this. In situation 1, When the first bill and second bill due, third bill arises. So how this is defined by Govt. When three bills are due without any payment, are these three bills treated as a single transaction ?
Please check this Sir. Many people like me are searching the answer for this. Even Income tax officers not replying to these doubts properly.
Thank you
Dear Sir
Or is it simply Rs. 200000 is the limit for cash transaction in a year, whatever is the situation, irrespective of the no.of transactions ?
Dear Arnab ..I agree with you that there is indeed lot of confusion on this topic. Each one of us (business man / layman / professionals) has his own interpretations or perceptions..
My suggestion would be to slowly move from Cash based to non-cash based transactions over the next few months.
Because, our interpretation on the said scenarios may not necessarily match with say Taxman’s views.
Dear Sir,
I still not believe 200000 will be taken as aggregate in a year. Its for one transaction they said there is a limit. But the definition of one transaction has confusions. I believe I can still get more than 2 Lack as cash as aggregate total a year.
Dear Arnab,
Yes, the cash receipts can be more than Rs 2 Lakh. The said penalty shall however not be levied if the person proves that there were good and sufficient reasons for such contravention.
any person make retail sale less than rs 20000/- to single person and aggregate of that bill of any financial year is more than rs 200,000/- and party give cash then is this section of penalty be imposed???
Sir,
I am businessman if i withdraw an amount of rs 2 lakhs via cheque. Would it attract any sort of penality. Please clarify.
Thank you
No Praveen, no issues w.r.t cash/non-cash withdrawals from Banks.
Dear Team
I have a specific query. We have a business of Hypothecatiion or Auto Loan and we receive installment from our Creditors to whom we have financed vehicles
Can we receive cash installment from them every month and upto what amount
for example I have financed a Vehicle for Rs. 5,00,000 and for 3 Years and receive monthly installment of Rs. 18000, can i receive the installement in cash and upto what amount can I receive payment in cash from the creditor.
Please clarify my about doubt.
Also as per the Rule will 1 Installment be treated as a single event or 1 agreement be treated as a single event .
Dear Rohit,
Advisable to switch to Non-cash mode…
Sir, would you please advise on the following:
Suppose, Mr. A retired from Service. His annual income is taxable. He invested some portion of his retirement benefits in FD in the name of his wife, Mrs. B, who has no source of income and is Sr. Citizen. Form 15H contains a declaration to the effect that the income (in this case FD interest income) is not inclusible in the income of any other person. Submitting Form 15H means that she does not want to pay tax. However, both Mr. A and Mrs. B want to pay tax. The problem is that if Mrs. B submits Form 15H, tax will not be deducted at source which will amount to evading tax, as the income from FD interest is chargeable at the hands of her husband. Further, her submission will also be construed as false. If she does not submit Form 15H, 10% tax will be deducted, credit for which cannot be claimed by her husband. OR can her husband claim credit for the payment of the TDS from her income and how? Please advise what should be done to pay tax easily and claim credit also for the same (by her husband).
FDs of Mrs. B are likely to continue in the coming years also. What should be done with those FDs?
Dear ramesh,
Kindly note that the amount given by a husband to his spouse can be considered as Gift, and any income earned on this is clubbed to the income of husband and is taxable accordingly.
Kindly read :
Misconceptions on TDS.
Gifts & income tax implications.
purchased old gold from public by paying cash more than 20000 rupees which is mounting to 5.4 crores in the financial year 2013-14 and sold the same gold in account .for the same purchase and sales bills were raised and paid sales tax for the same. also filed itr till today. not disclosed the cash purchases of more than 20000 . if it department checks now whether they disallow it and if so how much payment has to be made from our end
Dear srinivasan ..Kindly consult a CA and take advice in person.
Dear Sreekanth,
i am using icici salary account, my monthly salary is less than 12000 only ,so did not file any tax.
one of my friend doing business and every month he used to transfer some amount to my account through online only ( NEFT, IMPS) by this way my yearly credit exceeds more than 10 to 15 lakhs.
Now my doubt is will it be a problem for me .please clarify .
thanks in advance.
S.Raja
Dear Raja ..Yes, there can be a compliance issue.. Suggest you not repeat this in future..
Sir,
If my father-in-law and my mother-in-law give 1.9L cash each on her birthday, then will it attract IT ?
single day
single occation
BUT BLOOD relatives
Regards,
Jacob
Dear Jacob ..As the occassion or event is common, I believe that this may fall under Section 269ST, as the total amount would be more than Rs 2 Lakh.
Sir
Myself is trader and i trade goods to the dealers to which we make invoice per day of some amounts 10000 / 20000 or vise versa and which are credit billing and we accept the cash against this bills after 15-20 days or minimum 7 days to which the total t’over for this dealer could exceed in a year 300000 and cash receipts for their invoices after a 7days period or 15-20 days .
so just wanted to confirm that what would be status for multiple billing and multiple cash reciepts which are not getting cash for invoice same day or nor the 2lac transaction because some of unregistered dealers still giving cash payment against the invoice made .
Regs
pratik
Dear Pratik .. Suggest you to kindly take advice from a CA.
Dear Sir
this act is applicable on financial company or not. pls confirm
Dear Om,
Except those which are specifically exempted like banks, Govt, Post office, Cooperative banks etc., Section 269ST will be applicable on receipt of money by all persons such as individuals, HUFs, firms, companies, trusts, charitable Institutions, AOPs/ BOIs etc.
Dear Sir,
I am a salary person and i withdraw Rs. 80000/- per month. Is there any question from IT department
regads
salim
Dear salim ..Kindly note that cash withdrawals from banks/Post office do not attract any penalty.
Dear Sreekanth
if I am buying 2 cars from the same dealership but paying 1.9Lacs on 1 day for the 1st car and 1.9lacs on a different day for another car . Will it result to a penalty ?
is there a limitation of paying less than 2 lacs in day or is it for a month or a quarter
need clarity
Rgds,
Shukla
Dear Shukla ..I believe that section 269ST is not applicable in this said scenario.
Limit is Rs 2 Lakh per day per person. But it depends on different kind of scenarios.
For example, a person cant receive gifts of more than Rs 2 Lakh on the occasion of marriage even it is given on different days.
Sir , if we make a cash sale bill no.1 of rs.150000 & bill no. 2 of rs.150000 both on the same date . And receive a cash deposit in our current account by the client of total amount of rs.300000 on the same date in single transaction with PAN number mention .Will it be okay or not ? Please suggest .
Dear Rahul ..If it is from a single person and related to single transaction then penalty is applicable as per section 269ST.
We do not mention the party name in cash sale bill below amount of rs. 200000. Pls suggest
Dear Rahul ..That can be even more dangerous..
Hi Sreekanth,
This is Deepa Kakkad from ICICI Home Finance
We have appointed ICICI Bank as a collection agent, therefore if a borrower wants to make repayment of loan they can go to any branches of ICICI Bank and deposit the cash in our account
So my question is if an individual deposits cash of Rs. 2 lakh or more directly in my bank account will it be considered as a contravention of Section 269ST though the cash was deposited in account. Pls suggest if there is any alternate way of collecting cash
Thanks,
Deepa Kakkad
Dear Deepa,
Kindly note that Section 269ST shall not apply to—
(i) Any receipt by—
(a) Government (or)
(b) Any banking company, post office savings bank or co-operative bank;
right but we aren’t banking company
so if bank accepts cash from customers and deposits in our bank account is ok?
Dear Deepa,
If bank collects cash then its fine and if they deposit through online mode/Cheque mode/DD, then it should be ok.
Sir i have a wholesale shop
My question to you is:
I have a cash sale from various Un registered buyer in a day amount 300000 like 20000 sale from ram and 40000 from shyam and 60000 respectively.
Please tell me is there any problems to sale in cash amount less then 200000
And my cash sale amount 300000 I can deposit into my current account
And also I have to maintain any record of buyer who bought goods in cash?
Dear Govind ..Kindly maintain proper Bills & book of accounts for Cash related transactions.
Sir, I have a handloom shop
Also tell me if we have debtor in our books amount 500000, and we receive 10000 per day from.
It’s necessary to get his pan no.? And same to show in income tex?
Sir, I have a handloom shop
I have a question that if one person or firm bought goods from me 150000 in cash on 1st April and just next day he bought another goods 2nd April worth 150000 in cash
Shall I mention his pan no. Is compulsory?
Or I can identify him is enough?
Can I deposit Cash Rs 25,000 per month my Bank account under Salary head for a whole financial year.
Dear Vipul ..Yes, you may do so..
Thanks Sreekanth
Sir if i deposit 4.5 lacl through cheque n withdraw 2 lac from that in somedays.so will the penality applicable for it ???
Dear guri ..No, its not applicable..
Dear sreekant i had taken a loan from a friend he had given me in cash the amount is close to 1 cr , now he wants the money in cash . if i withdraw 10 lakhs per day or per week will i be liable to pay penalty
Dear ROHIT,
Did you deposit Rs 1cr cash in your bank account?
Kindly note that Cash withdrawals are not subject to any penalty.
NO . But some amount i had deposited ,if cash withdrawals are not subject to any penalty then i can withdraw entire amount in cash?
I withdrawn Rs.200000 personal loan from my savings account on 13.4.17. will this attract tax.
Dear bharathi ..Kindly note that cash withdrawals from a bank do not attract penalty u/s 269 ST.
Hi Sreekanth,
Very nice article!!!
My question is –
1] If I am making Rs.50,000 NEFT transfer to my wife for 4 days and if she withdraws 50,000 daily from ATM. Will this attract penalty?
2] If consecutive 10 days (40,000 everyday) I withdraw cash from ATM. Will this attract penalty?
Dear Rahul,
1 – No.
2 – No.
Penalty u/s 269ST is not applicable on Cash withdrawals from a Bank/Post office .
Thanks Sreekanth!!!
Hi Reddy,
I’m a car dealer and we usually have 2 nature of invoices for selling a car since the cars are usually worth Rs 3,50,000 or more these days :
1. Main Retail invoice for the car
2. Charges invoice (For RTO, Insurance, Extended Warranty, Accessories etc etc) for the same car!
Though it’s a single event and it is for one single car on the same day but the invoices are separate, but ‘on the same name’.
My question to you is that, What if we accept total cash more than Rs. 2,00,000, where Rs 1,99,000 max is taken for the first invoice (1. For the main retail invoice of the car) and for (2. Charges invoice like Rto, Insurance etc.) we accept cash for that as well and show that accordingly.
Since, the invoices are different so is it going to attract penalty?
Also, should we keep anything in mind if the same car comes to our workshop on any other day in the entire year to get work done for service as well?
Looking for your help on this.
Thanks
Dear Piyush,
Tricky one 🙂
As the two invoices are related to Sale of car, I believe that if both amounts put together is above Rs 2 Lakh paid in cash , may attract penalty.
However, Servicing the car can be considered as a different transaction altogether.
Kindly check with a CA too.
Hi Sreekanth,
Landlord rents his property to a Tenant for a Monthly rental of say Rs. 20,000. Let’s ignore the “Rental advance” here for simplicity. The tenant pays the monthly rental via Cash. So, after 10 months of continuous stay the total accumulated rent would’ve amounted to 2 Lakhs. So, beyond 10 months, any money received by the Landlord from the Tenant is illegal under this new section?
Dear Rathna,
Its not done in a single day, can be considered as multiple transactions (multiple rent receipts can be issued/received) and not related to any single event, so I believe that this section may not be applicable here..
sir, Rs.2 lakh cash transction limit accumulated in a year or in a day
kindly reply .
Dear RAVI ..You need to analyse the situation based on the three mentioned point put together.
For example : I can deposit Rs 2 Lakhs in bank on different dates in a Financial year, but if I deposit Rs 2 Lakh in a single day then this section is applicable.
Hi Sree, thanks for sharing useful information, i have one question if I have receive 1,50,000 from a single person for weekly for different transaction does it attract for penalty? Please clear
Dear Shashi ..No, it wont attract penalty, the amount is less than Rs 2 lakh.
Hi Sreekanth,
If A business man collects more than 2 Lac from one person cumulatively during a Year for Sale of Invoices on different dates than is he require to furnish all the Details / Records of PAN No. / Aadhar No. of source to Income tax department?
Dear Rajen ..No, based on the said assumptions. But, advisable to minimize dependency on cash transactions as much as possible..
It is not required to submit the mentioned details to the IT dept.
Hello sir,
I am grain merchant . Can I pay in cash more than 2 lakh to a single farmer ?
No, dear Pankaj..
I have heard by a CA that in case of farmer it goes . I am in trouble . Bcs its not clear
My view is that you can. As in this section (269ST) exemption granted to 269SS person. 269SS says that if a person having agriculture income and does not have any other taxable income in other head (which mean below 2,50,000) then 269ST will not attract.
Please read 269ST exemption and Read 269SS section together.
Exemptions from section 269SS: The Following persons are exempted from the purview of section 269SS:
a) Government ;
(b) any banking company, post office savings bank or co-operative bank ;
(c) any corporation established by a Central, State or Provincial Act ;
(d) any Government company as defined in section 617 of the Companies Act, 1956
(e) other notified insititutions
(f) where the depositor and the acceptor are both having agricultural income and neither of them have any taxable income.
Neither of them have any taxable income ?
yes, Its neither of them.. both person should have agri income and neither of them have any taxable income. which mean you should have Re 1 agriculture income and your taxable income should be nil.
Thank you dear Dixit for your inputs.
Here, grain merchant is not a farmer. So, section 269ST is applicable.
https://goo.gl/5KsvnI
Check this if it helps
I am a businessman . My Question is how much I can sell particular one person in a year..
If every week a Particular person purchase goods worth Rs.50,000/= in cash . Is there any problem / violation of the 269ST Rules ?
Dear Rajib ..As much as possible, stay cautious when you do cash transactions, try to avoid them.
Hello Mr. Reddy!
You have covered the topic in an excellent way!
Quick Question
If person A is doing business and receives cash of more than 2 lakhs a day but on different bills and by different people is he/she liable to pay penalty ?
Thanks in Advance
Dear Ashima ..No, penalty is not applicable, based on your query/assumptions..
to the above, i’d like clarity, suppose i’ve make a bill for 2lacs and revieved the amt via cash, with in the same week can i issue him another invoice of 2 lac and collect the same via cash ?
Dear ahmed ..I beleive, you can, provided it is related to a different transaction.
Hello,
What about insurance claim received from insurance company, with amount more than 2,00,000?
Will it be considered under this?
Dear Mr Patel ..No, it wont come under this section’s purview, as the amount is tax-free and paid through banking channel(s).
Hi Sreekanth,
Transferring online money to relatives less than 2 lakh in 5 install ments will attract any penalty
No, dear Neeraj ..
Sir, It’s very useful to know the tax details.
thanking you,
regards,
george.t
Tamil Nadu.
We r hospital authority and one of our patient bill is 240000 & he paid total 199000 in Cash & remaining amount by credit card on different days then r we liable for penalty
No, you are not violating the section 269ss. Because on swiping credit card, the money goes directly to you account and the person who is swiping it is in loan liability. Hence above INR 1.99 lacks is not in cash
sir, i am doing a FMCG business in this bussines i am sell Product on shop( kirana ). Many shop owner paid me cash like 500/- to 40,000/- . some times in a single day we received cash from various shop and total sum of all ammount is more than 2 lack . what can i do ? can i deposit more than two lack in a single day on my current account ?
Dear Rishabh,
Advisable to encourage your clients to use cheque payments going forward.
If I purchase rural land from farmer and paid RS.12,00,000 to him. Who is liable for penalty whereas farmer not knew about the law because of illiterate.
Dear mayank,
You may inform him/her about the new amendment.
In this scenario, the farmer (receiver) is liable to pay the penalty.
If I have received 150000/- advance on 29/03/2017 and another received 150000/- on 02/04/217. And I have raised Single Invoice on 02/04/2017. Whether it will cover under 269st?
Dear jaymin,
As the new section is applicable w.e.f 01-Apr-2017, I believe that Section 269ST is not applicable in this case.
Hi,,
i had withdraw 2 lakh cash from bank on 04-04-2017., is there any penalty applicable ??
also asked to bank executive when withdrawing cash but they said no penality applicable. after reading your article i am
bit confused now??
please clerify me ???
Dear Deepak,
By penalty, they would have understood it as bank charge/fee.
As mentioned in my previous (below)comments;
As per Section 269ST : The said penalty shall however not be levied if the person proves that there were good and sufficient reasons for such contravention / violation.
If your purpose is genuine, kindly keep a record of transactions and if required, you may justify your stand.
the penalty is applicable for 2 lakh amount or more than 2 lakh amout ?
and what do you mean by ” keep a record of transactions” please clarify ??
Dear deepak,
As per latest news, cash transaction limit on Cash withdrawals from a bank have been removed. No penalty is applicable on bank cash withdrawals.
Hi sir
I with DRAW amount 745000 from bank on april2
What to do now
Shall I deposit amount in bank
Dear Sri,
If you deposit cash, it may be termed as double violation.
As per Section 269ST : The said penalty shall however not be levied if the person proves that there were good and sufficient reasons for such contravention / violation.
If your purpose is genuine, kindly keep a record of transactions and if required, you may justify your stand.
Iam a current account holder and doing agri commodity trading business. for the goods sold to customer i do get RTGS of 15 lakhs and same i withdraw for purchasing goods from small and few big farmers. Its not neceesary that the bill amount to small farmer is above 2 lakh. It ranges from 100-200000 also. So my question is if i withdraw cash from bank via self cheque and buys goods via cash for small farmers and via RTGS from Big farmers with proper purchase bills ..will it get attracted to penalty? . rule 269st doesnt say about withdrawal of cash from bank.
Dear shivananda,
The key point here is ‘proper purchase bills’. So you have been maintaining / maintain bills, I believe that there should not be any issue. Even if you receive any compliance notice, you can submit the copies of these bills and provide sufficient reasons for deposits/withdrawals in cash.
Thanks, Sreekanth ! It is a very useful input for small investors !!
Hi sreekanth,
In private chit systems, everyone deals with cash and the one who wins the auction gets cash in hand. So is this law applicable if amount receivable is more than 2lakhs? If applicable, then how to get the amount?
Dear Bixapathi,
Yes, this amendment is applicable for chits too.
In such cases, I believe that the chit companies may have to issue Account pay cheques / make online direct transfer.
Hi Sreekanth,
I have transferred(online) 5 lack to my cousin, will this attract any penalty
No, dear naresh …
Nice Article, Sree.
Dear Sreekanth ! You have excellently covered the topic ! I have a doubt : Suppose I have invested a total of RS 10 lakhs in , Franklin ( India ) Build India Fund directly about an year back and want to redeem All The Units now. Will this attract any penalty ?
Dear Sir,
No, it does not attract any penalty, as the redemption amount will come into banking system through non-cash mode only.
Thanks, Sreekanth ! It is a great message for me !!