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Cash transaction above 3 lakh

Samir (Account Head) (207 Points)

09 February 2017

A new section 269st is proposed to prohibit the receipt of cash in excess of rs 3 lakh from a person in single day. Does this mean we can't withdraw cash more than 3 lakh in a day at one time.

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29 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 09 February 2017

"..........the receipt of cash in excess of rs 3 lakh from a person in single day........"

Withdrawal from Bank/s not specified.

1 Like

Samir (Account Head) (207 Points)
Replied 09 February 2017

Bank is also a person so it is applicable on withdrawal also

1 Like

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 09 February 2017

Wait till RBI notification in this regard.

manoj (student) (5205 Points)
Replied 09 February 2017

Bank is not a person as it is limited word sufix

Samir (Account Head) (207 Points)
Replied 09 February 2017

As per section 2(31) person includes an individual, huf, a company, a firm, bank is also company

1 Like

Ali Ahmed Khan (CA Student) (245 Points)
Replied 09 February 2017

Whether cash limit of Rs 3lack will attract to receiver it giver?

Ali Ahmed Khan (CA Student) (245 Points)
Replied 09 February 2017

Whether cash limit of Rs3 lack will attract penalty to receiver or giver (payer) of amount ???

Samir (Account Head) (207 Points)
Replied 09 February 2017

Penalty on receiver

1 Like

Manu Gawri (CA-Final ) (1187 Points)
Replied 09 February 2017

Yes the memorandum annexed to the budget proposes to impose a penalty under a new section 271DA it says as follows

"It is also proposed to insert new section 271DA in the Act to provide for levy of penalty on a person who receives a sum in contravention of the provisions of the proposed section 269ST. The penalty is proposed to be a sum equal to the amount of such receipt. The said penalty shall however not be levied if the person proves that there were good and sufficient reasons for such contravention. It is also proposed that any such penalty shall be levied by the Joint Commissioner."

4 Like

Manu Gawri (CA-Final ) (1187 Points)
Replied 09 February 2017

Read the memorandum to Budget it exaplaines the intension of the government to introduce this limit

Following is for your reference

"In India, the quantum of domestic black money is huge which adversely affects the revenue of the Government creating a resource crunch for its various welfare programmes. Black money is generally transacted in cash and large amount of unaccounted wealth is stored and used in form of cash. In order to achieve the mission of the Government to move towards a less cash economy to reduce generation and circulation of black money, it is proposed to insert section 269ST in the Act to provide that no person shall receive an amount of three lakh rupees or more,—

(a) in aggregate from a person in a day;

(b) in respect of a single transaction; or

(c) in respect of transactions relating to one event or occasion from a person,

otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account"

Manu Gawri (CA-Final ) (1187 Points)
Replied 09 February 2017

Sir,

The Memorandum says this section shall not apply to banking company, from plain reading it is very clear that the bank can recieve the amount of INR 3,00,000 from its account holder, but the question is what happens to other way around, can the account holder withdraw morethan 3,00,000 in a day as he is the reciever in this transaction and this section is very much applicable to this assessee.

1 Like

Parshuram Vasaikar (Chartered accountant) (172 Points)
Replied 09 February 2017

*New section 269ST is applicable as under*

1. If u accept 3 Lac or more from same person in a day even against different bills section is violated

2. If u accept 3 Lac or more from a person against one bill even on different days section is atracted

3. If u accept 3 Lac or more from a person for a series of transactions emanating from one event or ocassion section is attracted

Applicability of section 269ST

1. If one sells goods worth Rs 450000 through three different bills of 150000 each to one person and accepts cash in single day at different times then section 269ST(a) will get violated

2. If one sells goods worth Rs 400000 through single bill to Another person and receives cash of 200000 on day1 and another 200000 on day 2 then section 269ST(b ) will get violated.

3. If A accepts cash of 100000 for catering Rs 150000 for decoration and rs 150000 for tent house work then section 269ST(c) will get violated even if cash is accepted on different dates. Penalty for Violation being 100% of cash received!

Hemant (AM - IA/SOX) (78 Points)
Replied 10 February 2017

Guys can we interpret Sec 40A(3) and 269T for complete disallowance. Though limit is 300K for receiving money but still it gets countered by 40A(3). An indiviual or HUF (especially not req to prep P&L or R&E) can take a shelter of the same) Rest of the persons, if these payments are booked will get disallowed. Any comments?

dinesh (proprietor) (27 Points)
Replied 10 February 2017

I don't agree with the view that limit of Rs.300,000/- is applicable for withdrawal from Bank.For the simple reason that, i am not receiving from Bank, i am only withdrawing money from Bank out of my account. when you account it in books of account, cash balance goes up and Bank balance comes down. That means, in this transaction, no two parties are invloved. when you say, you are receiving cash means, there must be another person in the transaction.

1 Like