Cash Receipt above Rs 2 Lakhs in Income Tax treatment

Cash Receipt above Rs 2 Lakhs in Income Tax treatment In this article, we will discuss if Businesses should take accept Cash receipts above Rs 2 Lakhs. So Let us Discuss this Keeping in Mind the provisions of Section 269ST.

Exactly what is the Limit of Cash Receipt as per the Section and for the circumstances?

No person shall receive Rs 2 Lakh or More in cash:

• In an aggregate day from a Person
• In respect of a single transaction
• In respect of transaction related to one event

What are the means allowed other than Cash?

• account payee cheque or
• account payee bank draft or
• use of electronic clearing system through a bank account
• or through such other electronic mode as may be prescribed

Who is the taxpayer on which provisions of Section 269ST are applicable?

These provisions are applicable to any persons including individual, HUF, company etc.

Are there some exceptions on which these provisions are not applicable?

These provisions are not applicable on receipt by:

• Government
• Banking Company
• post office saving bank
• co-operative bank

If any transaction is already covered by Section 269SS [Accepting Loan, Deposit etc in cash], can the same be covered in Section 269ST?

No, if the Transaction is already covered by Section 269SS, the same will not be covered by Section 269ST again.

Can you explain the Scenarios with some examples?

A. Cash Receipts in a single day:

Customer	A	B	C	D
Invoice 1	300000	50000	50000	190000
Invoice 2	0	250000	50000	40000
Invoice 3	0	0	200000	70000
Total	300000	300000	300000	300000
Cash Receipts in a single day		100000	200000	300000
Electronic Mode	300000	200000	100000	0
Penalty	Not Applicable	Not Applicable	Applicable	Applicable

B. Cash Receipts in Respect of a single Transaction:

Customer	A	B	C	D
Invoice	300000	300000	300000	300000
Cash Reciept		100000	200000	300000
Electronic Mode	300000	200000	100000	0
Penalty	Not Applicable	Not Applicable	Applicable	Applicable

C. Cash Receipt on Occasion of Marriage (Related to specific Event):

Relative	I	II	C	D
A	300000	50000	50000	190000
B	0	250000	50000	40000
C	0	0	200000	70000
Cash Reciept	300000	300000	300000	300000
Penalty	Applicable	Applicable	Applicable	Not Applicable

What is the Quantum of Penalty if the sum is received in contravention of Section 269ST?

The penalty of a sum equal to such receipt can be levied if the sum is received in contravention of section 269ST.

Is Limit of Rs 200000 on an Aggregate Basis?

No, the Limit is Day wise/ Transaction Wise/ Event Wise. [Please refer to above-given examples]

Is Transaction in contravention to Section 269ST required to be reported by the Auditor in Tax Audit?

Yes, Transaction in contravention to Section 269ST required to be reported by the Auditor in Tax Audit [Clause 31 of Tax Audit Report]