Cash Payment Limit: Those paying in cash should be careful, Income Tax Department has told the limit..
The most surprising thing is that the penalty is imposed not on the person giving the money but on the person taking it. Now you must be wondering what kind of rule is this and why was it made.
Actually, the government has made this provision in section 269ST of the Income Tax Act to prevent tax evasion. Let us tell you when this government brought this rule and what are the provisions in it.
What is section 269ST?
The Central Government had added Section 269ST to the Income Tax Act in 2017. According to tax expert Balwant Jain, under this rule, no person can take more than Rs 2 lakh in cash in a day. The objective of the government behind this step is to stop black money and money laundering.
In such a situation, if you are taking an amount of Rs 2 lakh or more in cash, then do not do so at all. Now you will think that if you cannot take it in cash then how to take it. You can take an amount of Rs 2 lakh or more only through banking channels, like account payee cheque, or bank draft, or transfer it to the bank through internet banking.
Remember, if you use self-check for an amount of Rs 2 lakh or more, then it will also be considered as a cash transaction and a penalty will be imposed on it. This rule also applies to the amount received as a gift. No person can accept a cash gift of more than Rs 2 lakh from anyone on any special occasion. This rule also applies to money received by a person from his relatives.
The rule does not apply in these cases
Section 269ST of the Income Tax Act does not apply to amounts received by the Government, any banking company, post office savings bank, or co-operative bank.
How much is the fine
For violation of Section 269ST of the Income Tax Act, 1961, a fine equal to the amount of the transaction is imposed on the person. If you receive Rs 2,10,000 in violation of the provisions of Section 269ST, you may be fined up to ₹ 2,10,000.
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