Say No to Cash Transactions: Cash Transaction Limits under Income Tax Act

Income Tax Department has updated about Cash Transaction Limits under Income Tax Act.

what will be the consequences, if the cash amount crossed the particular limit:

1. Section No.13A(d) related to Donation Received by Political Parties, where cash limit is Rs.2000.

What if limit Crossed: Exemption Disallowed

2. Section No.35AD related to Deduction in respect of expenditure on specified business, where cash limit is Rs.10,000.

What if limit Crossed: Exemption Deduction Disallowed

3. Section No.40A(3) related to Expenses or payments not deductible in certain circumstances; Payment made for plying, hiring or leasing goods carriages (Exception Rule 600), where cash limit is Rs. 10,000 and Rs. 35000.

What if limit Crossed: Exemption Deduction Disallowed

4. Section No. 43(1) related to Expenditure for Acquisition of any Asset, where cash limit is Rs.10,000.

What if limit Crossed: Not to be Included in Actual Cost (No Depreciation)

5. Section No. 80D(2B) related to Deduction in respect of Health Insurance Premium; (Exception Preventive Health Check-up), where cash limit is NIL.

What if limit Crossed: Deduction Disallowed

6. Section No.80G(SD) related to Deduction in respect of Deduction in respect of donations to certain funds, charitable institutions, where cash limit is Rs.2,000.

What if limit Crossed: Deduction Disallowed

7. Section No.80GGA(2A) related to Deduction in respect of certain donations for scientific research or rural development, where cash limit is Rs.2,000.

What if limit Crossed: Deduction Disallowed

8. Section No.80GGB related to Deduction in respect of contributions given by companies to political parties, where cash limit is NIL.

What if limit Crossed: Deduction Disallowed

9. Section No.80GGC related to Deduction in respect of contributions given by any person to political parties, where cash limit is NIL.

What if limit Crossed: Deduction Disallowed

10. Section No.269SS related to Mode of taking or accepting certain loans, deposits and specified sum; (Specified sum means any sum of money receivable in relation to transfer of an immovable property); (Exception if both are having agricultural income & neither of them has any taxable income), where cash limit is Rs.20,000.

What if limit Crossed: 100 % Penalty As per S.271D

11. Section No.269T related to Mode of repayment of certain loans or deposits, where cash limit is Rs.20,000.

What if limit Crossed: 100 % Penalty As per S.271E

12. Section No.269ST related to Mode of undertaking transactions (Other Cash Transations); (Not applicable if transaction covered u/s 269SS), where cash limit is Rs.2,00,000.

What if limit Crossed: 100 % Penalty As per S.271DA

13. Section No.269SU related to Acceptance of payment through prescribed electronic modes; (if Previous year Turnover is exceeding Rs. 50 Crore), where cash limit is NIL.

What if limit Crossed: Per Day 5000 till such failure continuous S.271DB

14. Section No.194N related to cash withdrawal from Banks/Post Office, where cash limit is Rs.1 Crore, 20 Lakh and 1 Crore.

What if limit Crossed: TDS@ 2 % if ITR Filed for 3 Preceeding Years, TDS @ 2 % if ITR Not Filed for 3 Preceeding Years, TDS@ 5 % if ITR Not Filed for 3 Preceeding Years respectively.

15. Section No. 44AB(a) related to Threshold Limit for Audit of Accounts increased to Rs.10 Crore if cash transactions do not exceed 5 %; The payment or receipt, as the case may be, by a cheque drawn on a bank or by a bank draft, which is not account payee, shall be deemed to be in cash, where cash limit is Rs.10 Crore.

What if limit Crossed: Liable for Audit u/s 44AB