CA Ashish Tater

CA Ashish Tater

IN-DEPTH ANALYSIS OF SECTION 269ST

BASIC PROVISIONS AS PER INCOME TAX ACT

Please note that CBDT has clarified vide press release dates 05.04.2017 that Cash withdrawals from bank do not attract Section 269ST Penalty and article is not been updated with this press release

APPLICABLE FROM 01/04/2017
PROVISION OF SECTION 269ST No person shall receive an amount of two lakh rupees or more—

(a) in aggregate from a person in a day; or

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(b) in respect of a single transaction; or

(c) 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.

EXCEPTIONS (a) Government;

(b) any banking company, post office savings bank or co-operative bank;

(c) transactions of the nature referred to in section 269SS;

(d) such other persons or class of persons or receipts, which the Central Government may, by notification in the Official Gazette, specify.

PENALTY FOR NON COMPLIANCE SECTION 271DA If a person receives any sum in contravention of the provisions of section 269ST, he shall be liable to pay, by way of penalty, a sum equal to the amount of such receipt

Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner.

ANALYSIS IN-DETAIL

APPLICABLE FROM
01/04/2017
APPLICABLE TO
Any person – Individual, HUF, Firm, LLP, Company, Trust…
TYPE OF RECEIPT
Any Receipt – Whether capital or revenue.
MAXIMUM CASH  RECEIPTS PERMISSIBLE
Below Rs. 2,00,000/-
PENALTY FOR CONTRAVENTION
100% of Amount Receipt
 
EXAMPLES OF TRANSACTIONS COVERED
In aggregate from a person in a day
Cash Receipts on a Single Day
CUSTOMER
A
B
C
D
Bill 1
2,50,000/-
50,000/-
1,90,000/-
1,00,000/-
Bill 2
1,50,000/-
5,000/-
25,000/-
Bill 3
85,000/-
TOTAL
2,50,000/-
2,00,000/-
1,95,000/-
2,10,000/-
PENALTY
YES
YES
NO
YES
PENALTY AMT
2,50,000/-
2,00,000/-
NIL
2,10,000/-
Cash Withdrawal from bank on a Single Day
BANK
BANK A
BANK B
BANK C
Cash Withdrawal 1
50,000/-
1,95,000/-
1,00,000/-
Cash Withdrawal 2
1,50,000/-
1,10,000/-
TOTAL
2,00,000/-
1,95,000/-
2,10,000/-
PENALTY
YES
NO
YES
PENALTY AMT
2,00,000/-
NIL
2,10,000/-
Cash Receipt from Sale of Car [ Assuming Sale Value Rs. 4,00,000/- ]
PARTICULARS
CASE 1
CASE 2
CASE 3
Cash Receipts
4,00,000/-
2,00,000/-
1,00,000/-
Non-Cash Receipts
2,00,000/-
3,00,000/-
TOTAL
4,00,000/-
4,00,000/-
4,00,000/-
PENALTY
YES
YES
NO
PENALTY AMT
4,00,000/-
2,00,000/-
NIL
 
 
in respect of a single transaction
Payments received in Cash and Other than Cash
 
CUSTOMER
X
Y
Z
W
01/04/2017
Invoice Value
4,00,000/-
4,00,000/-
4,00,000/-
4,00,000/-
05/04/2017
Chq Pmt 1
1,00,000/-
1,00,000/-
1,50,000/-
2,00,000/-
10/04/2017
RTGS / NEFT
1,50,000/-
1,50,000/-
15/04/2017
Cash Pmt 1
50,000/-
1,00,000/-
70,000/-
75,000/-
20/04/2017
Cash Pmt 2
50,000/-
1,00,000/-
30,000/-
75,000/-
25/04/2017
Cash Pmt 3
50,000/-
1,00,000/-
50,000/-
 
TOTAL
4,00,000/-
4,00,000/-
4,00,000/-
4,00,000/-
 
TOTAL NON-CASH
2,50,000/-
1,00,000/-
3,00,000/-
2,00,000/-
 
TOTAL CASH
1,50,000/-
3,00,000/-
1,00,000/-
2,00,000/-
 
PENALTY
NO
YES
NO
YES
 
PENALTY AMT
NIL
3,00,000/-
NIL
2,00,000/-
in respect of transactions relating to
one event or occasion from a person
IN CASE OF INDIVIDUAL (Occasion: Marriage or Any other Events)**
SITUATION
1
2
3
CASH FROM A
1,90,000/-
2,00,000/-
2,50,000/-
CASH FROM B
1,50,000/-
1,25,000/-
50,000/-
CASH FROM C
1,60,000/-
1,75,000/-
2,00,000/-
TOTAL CASH
5,00,000/-
5,00,000/-
5,00,000/-
PENALTY
NO
YES
YES
PENALTY AMT
NIL
2,00,000/-
4,50,000/-
** On plain reading of the provisions of the section, no person can receive cash of Rs. 2,00,000/- or more on one event or occasion from a person. In other words, the restriction is on per person per event / occasion.

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Category : Income Tax (25143)
Type : Articles (14565) Featured (4133)
Tags : Budget (1473) Budget 2017 (351) Section 269ST (21)

9 responses to “In-Depth Analysis of Section 269ST basic provisions as per Income Tax Act”

  1. sumit poddar says:

    Hi Assume my self trader,Can i make a purchase upto 200000 for single peron in day in cash.

  2. ASHAY CHHAPARIA says:

    Section 40A(3) Will be applicable on person who purchase goods of Rs 20000/- and above in cash.

  3. Ravi Shankar says:

    Please remove cash withdrawal from bank in the illustrations.
    Such a penalty could not have been levied on own cash withdrawals from bank and it has been clarified in a Press Release of CBDT dated 05-04-2017.

  4. MANASH DAS says:

    In another article on this site on 12th Feb, 2017, mentioned that “The word used is “Amount” and not “sum”. In other sections, the word “sum” has been used. The word “Sum” means “sum of money”. The word “Amount” includes cash and kind”. But here only cash component is covered. Please Clarify.

  5. rajinder aggarwal says:

    What will be the situation if i have two accounts in different banks and withdraw Rs 150000/- each from both account total amounting to Rs. 300000/-

  6. CA. VINAY V. KAWDIA says:

    In example 4 in case of customer Y and W no penalty can be levied. No need to aggregate cash receipts below 2 lacs on different days.

  7. Swapnil says:

    What if i have multiple transactions .I.e each transaction i clear the bill amount by paying cash bellow 2 lakh. But cash payment of multiple transactions is above 2 lakhs in a financial year. Is it liable for penalty?

  8. Hariprasad says:

    Good article giving elaborate explanation . Enables even common man to understand.

  9. atul says:

    if i sold a tractor 5.5 lakh and recive 190000.00 and remaining payment rec by cheque.so this is right or not

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