CA Ashish Tater

Ashish TaterSection 269ST is introduced by Finance Act, 2017 with effect from 01.04.2017 and put a limit on Cash Transaction to put a check on Black Money and Tax Theft. Section is much talked about section as it provides penalty for any cash transaction above the value of Rs. 2 Lakh, equal to the Transaction amount. In this article author made an attempt to Analyse the section in Tabular manner for easy understanding of Readers:-

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

(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.

DISCLAIMER: To the best of our knowledge, all information included here are true. We strive for accuracy but cannot be held responsible for any errors in the information featured herein or incorrect attributions. M/s. I. C. Tater & Co. & M/s. I. C. Tater & Associates do not represent or warrant that the information herein are complete or current and while we use reasonable efforts to include accurate and up to date information, we make no warranties or representations as to its accuracy. We assume no liability or responsibility for any errors or omissions in the content. We further assume no liability or responsibility for incurring any loss on relying on the information herein.

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Tags : Budget (1957) Budget 2017 (356) Section 269ST (24)

33 responses to “Section 269ST Basic Provisions as Per Income Tax Act”

  1. Suresh Pai S says:

    Cash withdrawn from bank is excluded . CBDT issued a circular in this regard. Please correct this article.

  2. Rakshith says:

    if you have bought a property above 700000, and paid 500000 in cash…how can You avoid any taxation?

  3. Melvin says:

    Sir, is this provision applicable to a NBFC when it repays its loan amount or deposit accepted from public ?

  4. shinemca says:

    Going by an income tax department circular issued 04.07.17, it appears that you can repay your entire loan amount to any HFC (Housing finance company) or NBFC (Non-banking finance company) in cash provided each instalment is less than Rs 2 lakh. As per the new income tax rule introduced in the last budget, cash payments/receipts of or over Rs 2 lakh are illegal and will attract penalty.

    This rule had created confusion as to whether the rule applied to single instalment repayment of loan or to the entire repayment amount. The finance ministry issued a circular dated July 3, 2017, clarifying that the prohibition of cash payment would only apply to repayment of a single loan instalment in cash and not to the aggregate amount.

    Section 269ST was introduced in the last budget to discourage the use of large amounts of cash as a step towards controlling generation of blac ..

  5. RAJEN BANSAL says:

    DEAR SIR IF A DEALER ISSUES TAX INVOICES TO DIFFERENT CUSTOMERS ON A SINGLE DAY AND RECEIVES CASH FROM THEM THAT EXCEEDS 2 LACS AS A SUM AGGREGATE DOES IT ATTRACT PENALTY
    2.IF A DEALER ISSUES MULTIPLE TAX INVOICES OF RS180000 MULTIPLE TIMES IN A YEAR ON DIFFERENT DATES AND RECEIVED BILL TO BILL CASH NOT EXCEEDING THE THRESHOLD LIMIT DOES THIS ALSO ATTRACT PENALTY

  6. SURRINDHHARRAW says:

    Payments received in Cash and Other than Cash:

    AS PER THE GUIDELINES PER DAY CASH TRANSACTION LIMIT IS Rs. 2 LAC BUT IN THE ABOVE TABLE THERE IS A PENALTY OF AN AMOUNT BY 1 LAC IN 3 DIFFERENT DATES.

    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/-

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