Hello readers, Today I will discuss very confusing and important topic cash transactions limit under GST/INCOME TAX ACT –
Under GST– Presently, there is no provision restricting cash transactions under GST.
Under Income Tax – Section 269ST of Income Tax was introduced in 2017.
It states that no person/individual must receive an amount of Rs 2 lacs or more under following conditions-
- In aggregate from a person in a day or
- In respect of a single transaction; or
- In respect of transactions relating to one event or occasion from a person, otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account.
Analysis-
A person cannot receive an amount of Rs 2 lacs or more in a single day or in respect of single transaction or even one event or occasion – example-
A person sells goods worth 3 lacs to Mr B against single bill then even if he receives Rs 100000 on one day , Rs 80000 another day and Rs 120000 third day –penalty provisions will be applicable…
Take another example-
A person provides some services relating to a marriage event and issues invoices amounting to Rs 30000 then again Rs 195000 another day then also penalty provisions applicable.
This section will not apply to
- Government Company
- Any banking company
- Post office saving bank
- Co-operative bank
- Other persons as may be specified
Amount of penalty- Penalty equals to amount received in cash.
- Cash expense Limit- Section 40A(3)
Threshold limit: Cash payment exceeding Rs 10000 to person in a single day not allowed. The Limit is extended to Rs 35000 in case payments are being made for transporters.
Amount of penalty- No penalty but expense will be disallowed.
- Cash Loan/Deposit :
Section 269 SS –A Person cannot accept cash loan or deposit of Rs 20000 or more from another person.
Penalty- 100 % of loan or deposit accepted in cash.
- Repay loan or deposit- Section 269T
This section prohibits a person from repaying the loan or deposit or any specified sum in cash if:
The repayable amount of loan or deposit or such specified sum (including interest on such amounts) is INR 20,000 or more
Amount of penalty- Amount of loan repaid in cash.
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Author Bio
Dear sir/Ma;am,
Please guide on cash sale transaction restrictions in jewellers firm. (As per income tax act)
How much should a cash sales invoice amount?
please co operate.🙏
how much cash received in a year from a person against sales bill in a year . exp. A person sells goods worth 120000 to Mr ramesh against single bill then even if he receives Rs 40000 on one day , Rs 30000 another day and Rs 50000 after 5 day. Is it legal ? or any penalty will be imposed . what is cash receive limit in a year.