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Business News/ Money / Personal Finance/  Cash receipt of 2 lakh or more attracts Income Tax penalty
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Cash receipt of ₹2 lakh or more attracts Income Tax penalty

Section 269ST of the Income Tax Act does not apply to any receipt of amount by the government, any banking company, post office savings bank or co-operative bank.

If a person receives any sum in contravention of the provisions of section 269ST, he will be liable to pay a penalty of a sum equal to the amount of such receipt under Section 271DA.Premium
If a person receives any sum in contravention of the provisions of section 269ST, he will be liable to pay a penalty of a sum equal to the amount of such receipt under Section 271DA.

Income Tax Act restricts any person to receive an amount of two lakh rupees or more in cash, from a person in a day, in respect of a single transaction or in respect of transactions relating to one event or occasion from a person, under Section 269ST. However, such a transaction of an amount equal to 2 lakh or more is allowed through an account payee cheque or an account payee bank draft or use of electronic clearing system (ECS) through a bank account.

ECS through a bank account, as mentioned above includes payment through credit card, debit card, net banking, IMPS (Immediate Payment Service), UPI (Unified Payment Interface), RTGS (Real Time Gross Settlement), NEFT (National Electronic Funds Transfer), and BHIM (Bharat Interface for Money) Aadhar Pay. Payment of an amount of 2 lakh or more is allowed via any of these mediums as stated above.

What is the penalty if you receive 2 lakh via cash?

If a person receives any sum in contravention of the provisions of section 269ST, he will be liable to pay a penalty of a sum equal to the amount of such receipt under Section 271DA.

However if a person proves that there were good and sufficient reasons for the contravention, no penalty will be imposed.

Exemptions to Section 269ST of the Income Tax Act

Section 269ST of the Income Tax Act does not apply to any receipt of amount by the government, any banking company, post office savings bank or co-operative bank.

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Published: 24 Nov 2020, 02:09 PM IST
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