Income Tax Update: If you engage in daily cash transactions, this news is of utmost importance. It’s crucial to be aware that receiving more than 2 lakh rupees in a single day can result in fines. What’s particularly noteworthy is that the penalty is imposed on the recipient, not the party initiating the transaction. If you are involved in such transactions, exercise caution.
Understanding Section 269ST
The Central Government, with the aim of curbing tax evasion, introduced a provision in Section 269ST of the Income Tax Act. This addition to the Income Tax Act was made in 2017. According to this regulation, an individual is prohibited from receiving more than 2 lakh rupees in cash in a single day. The government’s objective behind this measure is to combat black money and money laundering. If you receive more than 2 lakh rupees in cash in a day, you may be subject to a penalty. It’s important to note that this rule does not apply to amounts received from banking companies, post office savings banks, or cooperative banks.
Penalty Assessment
Individuals found in violation of Section 269ST may face a penalty equal to the amount of the transaction. For example, if you receive 210,000 rupees in cash in a day, you could be fined 210,000 rupees.
Conducting Transactions Exceeding 2 Lakh Rupees
To facilitate transactions exceeding 2 lakh rupees, consider using online methods such as bank accounts, debit cards, credit cards, internet banking, UPI, RTGS, NEFT, and other digital platforms. This ensures a seamless and lawful financial process while avoiding potential penalties associated with cash transactions.
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