Scribd Logo
Upload

Welcome to Scribd!

  • 19 Say No To Cash Transaction

    Uploaded by

    Amit Mantry
    22 views6 pages
    This document summarizes key cash transaction limits and consequences under Indian tax law. It outlines limits and penalties for (1) taking or repaying loans over Rs. 20,000 in cash, (2) repaying loans or deposits over Rs. 20,000 in cash, and (3) receiving over Rs. 2,00,000 in cash in a day from a person. It also discusses disallowances for expenses and capital expenditures paid in cash over certain amounts. Penalties include equal amounts to the transactions. Exceptions exist for certain government and banking transactions.

    Original Description:

    Original Title

    19-say-no-to-cash-transaction (1)

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    This document summarizes key cash transaction limits and consequences under Indian tax law. It outlines limits and penalties for (1) taking or repaying loans over Rs. 20,000 in cash, (2) repaying loans or deposits over Rs. 20,000 in cash, and (3) receiving over Rs. 2,00,000 in cash in a day from a person. It also discusses disallowances for expenses and capital expenditures paid in cash over certain amounts. Penalties include equal amounts to the transactions. Exceptions exist for certain government and banking transactions.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    22 views6 pages

    19 Say No To Cash Transaction

    Uploaded by

    Amit Mantry
    This document summarizes key cash transaction limits and consequences under Indian tax law. It outlines limits and penalties for (1) taking or repaying loans over Rs. 20,000 in cash, (2) repaying loans or deposits over Rs. 20,000 in cash, and (3) receiving over Rs. 2,00,000 in cash in a day from a person. It also discusses disallowances for expenses and capital expenditures paid in cash over certain amounts. Penalties include equal amounts to the transactions. Exceptions exist for certain government and banking transactions.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 6

    SCAN OR CODE

    TO DOWNLOAD

    Certain: types of Cash: transactions


    have:serious consequences:
    Certain types of Cash transactions
    have serious consequences.

    1. Taking or Accepting
    Certain Loans, Deposits

    -— —
    No person is permitted to accept Rs. 20,000 or
    morein cash
    a) foranyloan ordepositor
    b) any amount in relation to transfer of any
    immovable property (even if transfer does
    nottake place).
    If any cash received from a person for any such
    purpose s still outstanding to be repaid, then the
    overall limit of Rs. 20,000/- will apply to the
    outstanding amount plus any subsequent receipt
    in cash.
    The exceptions to this provision include the
    following:-
    Sums of this nature accepted from
    (a) Government;
    (b) any banking company, post office savings
    bank or co-operative bank;
    () any corporation established by a central,
    state or provincial Act;
    (d) any Government company as defined in
    clause (45) of section 2 of the Companies
    Act, 2013;
    (e) such other institution, association or body or
    class of institutions, associations or bodies
    which the Central Government may, by
    notification in the Official Gazette, specify.
    (f) from a person having agriculture income,
    and the recipient is also having agriculture
    income and neither of them is chargeable to
    income tax.
    Consequences of violation: Penalty of an amount
    equal to the amount taken in cash will be levied.
    2. Repayment of Certain
    Loans or Deposits

    Any branch of a banking company or a


    cooperative society, firm or other person is not
    allowed to repay any loan or depositin cash if
    (a) The amount of the loan or deposit or
    specified advance* together with the
    interest, if any, is Rs.20,000/- or more, or
    (b) The aggregate amount of loans or deposits
    or specified advance held by such person,
    either in his own name or jointly with other
    person on the date of such repayment
    together with the interest, if any, is
    Rs.20,000/- or more.
    (c) w.ef 2019-20.TDS @ 2% to be deducted on
    cash withdrawals of Rs. 1 Crore in a year
    from bank account for business purpose.
    to any person who has made
    a) theloan ordeposit or
    b) paidthe specified advance*.
    This provision does not apply to-
    Repayment of any loan or deposit or specified
    sum* taken or accepted from -
    (a) Government;
    (b) any banking company, post office savings
    bank or co-operative bank;
    () any corporation established by a central,
    state or provincial Act;
    (d) any Government company as defined in
    clause (45) of section 2 of the Companies
    Act, 2013;
    (e) such other institution, association or body or
    class of institutions, associations or bodies
    which the Central Government may, by
    notification in the Official Gazette, specify.
    (Refer Sec.269T)
    *Specified advance means any sum of money in
    the nature of advance, by whatever name c:fied
    in relation to transfer of an immovable property,
    whether or not transfer takes place.
    Consequences of violation : Penalty for an
    amount equal to the amount of such loan or
    deposit repaid will be levied.

    3. Other Cash Transaction

    No person is allowed to receive in cash an


    amount of Rs. 2,00,000
    or more-
    (a) in aggregate from a personin a day; or
    (b) inrespect of asingle transaction;or
    (c) in respect of transactions relating to one
    event or occasion from a person,
    This provision does not apply to-
    (i) anyreceiptby-
    (a) Government;
    (b) any banking company, post office savings
    bank or co-operative bank;
    (i) transactions of the nature referred to in
    section 269SS;
    (iii) such other persons or class of persons or
    receipts, which the Central Government
    may, by notification in the Official Gazette,
    specify. (Refer Section 269ST)
    (d) w.ef 2019-20, Digital payments (Mode of
    electronic payments) is permissible in
    addition to account payee cheque, account
    payee bank draft or electronic clearing
    system through a bank account. Persons
    having business income and turnover/
    receipt exceedidng 50 crores in a financial
    year are mandatorily required to accept
    payment though prescribed electronic
    mode or other electronic mode only. In case
    of failure to do so, it would attract a penalty
    of Rs. 5000/- for every day during which
    such failure continues.
    Consequences of violation of this provision:
    penalty u/s. 271DA is levied for a sum equal to
    the amount of such receipt.
    4. Disallowance of
    expenses incurred
    in Cash

    — -
    In case a person incurs any expenditure for his
    business or profession, in respect of which
    payment or aggregate of payments made in cash
    in a day exceeds Rs. 10,000/, 100% of such
    payment will be disallowed while computing his
    taxable income from business/ profession.
    (Refer Section 40A(3)). However some
    exceptions are provided (See Rule 6DD of the
    Income Tax Rules).

    5. Deemed Income of
    Subsequent year in
    which payment is made

    In case an allowance has been made in respect of


    any liability incurred by a person for any
    expenditure, and then during any subsequent
    year the person makes payment in respect
    thereof in cash, the payment is chargeable to
    income-tax as income of the subsequent year if
    the payment or aggregate of payments made to a
    person in a day exceeds Rs.10,000/-.
    In case payment is being made for plying, hiring
    or leasing goods carriages, then limit is
    Rs.35000/-, instead of Rs.10000/-.

    6. Disallowance in respect
    of Fixed Assets i.e.
    Capital Expenditure

    - -
    In case a person incurs any expenditure for
    acquisition of any asset in respect which a
    payment or aggregate of payments made to a
    person in cash in a day exceeds Rs.10,000/-, such
    expenditure is not included for the purposes of
    determination of actual cost of such asset. This
    means that no depreciation benefit will be
    available on such capital expenditure incurred in
    cash.

    7. Cash Donations

    Donation made in cash to a registered trust or


    political party, if exceeds Rs. 2000, are not
    allowable as deduction u/s 80G.

    8. Premium on
    Health Insurance

    -— j—
    Any payment made in cash on account of
    premium on health insurance facilities is not
    allowable as deduction u/s 80D of IT Act.
    DECEMBER 2019

    DIRECTORATE OF INCOME TAX


    (Public Relations, Publications & Publicity)
    6th Floor, Mayur Bhawan, New Delhi
    www.incometaxindia.gov.in
    ) @IncomeTaxindia

    You might also like