Income Tax: Transacting in cash more than this limit in a day will be costly, Income Tax Department keeps an eye on it
Income Tax: Important news for taxpayers. Actually, let us tell you that the Income Tax Department is keeping a close eye on big cash transactions. In such a situation, you can get an Income Tax notice even for a small mistake.
Breaking News, Digital Desk- ( Cash Limit Without Income Tax Notice) The Income Tax Department is keeping a close watch on large cash transactions.
You can get an income tax notice even for a small mistake. Under Section 269ST of the Income Tax Act, taking more than Rs 2 lakh in cash in a day is prohibited, whether the transaction is in one go or in parts.
If you take Rs 5 lakh in cash in a day and the department gets to know about it, you may have to pay a heavy fine. This rule does not apply to cash withdrawals from banks and post offices.
When does this rule apply?
According to section 269ST, no person or entity can carry more than Rs 2 lakh in cash in a day in three situations. This section applies in the following situations:
Taking more than 2 lakh rupees from a single person in a single day
Charging more than Rs 2 lakh for a single transaction
Taking more than Rs 2 lakh for transactions relating to a single occasion or event
However, there are some exceptions to this. Apart from banks, institutions authorized by the government do not come under the purview of this rule.
Which sections of the Income Tax Act apply to cash transactions?
Sections 40A(3) and 43 – Dealing with cash payments
Sections 269SS and 269ST – Related to cash receipts
Section 269T – Relating to cash repayment of loan or deposit
Advice for taxpayers-
If you are going to give a large amount to someone or take it from somewhere, try to make that transaction through banking medium (like NEFT, RTGS or UPI). This will not only save you from income tax notice, but your financial transparency will also be maintained.
Nowadays, due to the promotion of digital payments, the Income Tax Department is keeping a close watch on cash transactions.
In such a situation, it is important to know that avoid taking or giving more than Rs 2 lakh in cash. This step will save you from heavy penalties and will also be safe for you. It is important to follow the law.