269st

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This discussion clarifies Section 269ST of the Income Tax Act, focusing on cash transaction limits for sole proprietorships and partnership firms. It explains that for sole proprietorships, cash withdrawals for personal use from business sales are generally not restricted by Section 269ST, as the limit applies to specific events and single transactions, not annual aggregates. The conversation also touches upon cash limits for partnership firms and clarifies rules around rental advances and gifts.

RAVI SAINI

RAVI SAINI (Querist)

14 March 2021 Suppose iam having propitorship business and cash sale of 1lakh rupee per day so monthly 30 lakhs.. i deposit 29 lakhs in current acnt of bank and take 1 lakhs rs cash to home for expenses monthly and show that drwaings in accounts
So taking 1 lakh out of business for personal use in cash would amount to violation of sec269st where above 2 lakhs we cant tak cash on an event.. so here i am taking 12 lakhs in a year cash.. so would i lialble for penalty here same as in cash of partnership firm sec 269st applicBle on profit withdrawl in cash

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

14 March 2021 Taking 1 lac per month for personal use is not a violation of 269st. No limit for cash withdrawal from own bank account.
In partnership firm Cash withdrawal allowed less than 2 lacs.

RAVI SAINI

RAVI SAINI (Querist)

14 March 2021 In partnership cash withdrawals allowed upto 2 lakhs ... the limit is on single day 2lakhs... or 2 lakhs per month or 2 lakhs per year..?

RAVI SAINI

RAVI SAINI (Querist)

14 March 2021 Also in propitorship cash withdrawals from business to personal use .. the limit of 2 lakhs applicable in this under 269 st?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

14 March 2021 Partnership cash withdrawal limit 2 lacs per year.
Prop no limit it's self withdrawal.

RAVI SAINI

RAVI SAINI (Querist)

14 March 2021 But in 269st no where is written that 2 lakh limit is with respect to year ..in section it is written that it is applicable on event , single transaction and single day payment

RAVI SAINI

RAVI SAINI (Querist)

14 March 2021 Suppose in propitorship if my business sale is 30 lakhs and from that i deposit 29 lakkhs in firm bank account and that 1 lakh left of sale cash take to home for personal use and show it as drawing in accounts.. would it be legal to do this bcz in a year i woulb be using 12 lakhs cash from business sale to personal..?
And also do i have to mandatory deposit the 30 lakhs in firm current bank accnt then .. again have to withdraw from bank for personal use..? Is it mandatory to do this process or just we can simply take out cash from business sale above 2 lkhs yearly

RAVI SAINI

RAVI SAINI (Querist)

14 March 2021 Also i case of salary if someone is accepting salary in cash 20000 per month from an employer under 44ad. ...do employee is chargable for 269st for accepting agreegate 2.4 lakhs salary in a year

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

15 March 2021 Yes, 269st is event based year and day is not relevant.
In case of proprietor 269st not applicable. You can do as proposed. You can spend for personal from business cash.
Monthly salary payment is an event need not be clubbed for a year.

RAVI SAINI

RAVI SAINI (Querist)

15 March 2021 Then why in case of partnership only 2 lakhs per year cash withdrawals allowed..? As the 296st is event based then how we decide it a year

RAVI SAINI

RAVI SAINI (Querist)

19 March 2021 Reply sir plz for the above question

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

19 March 2021 Agree with you it can't be a year. Sorry for the earlier reply.

RAVI SAINI

RAVI SAINI (Querist)

25 March 2021 So what’s the cash withdrawals limit in case of partnership per year?

RAVI SAINI

RAVI SAINI (Querist)

25 March 2021 Receiving 60 thousand rent in cash as advance of 3 month rent.. is violation of. Sec269ss and penalty?
So how much advance we can accept in cash for rental services or in case of goods also

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

25 March 2021 Less than 2 lacs rental advance and advance for goods supply can be received in cash.

RAVI SAINI

RAVI SAINI (Querist)

06 April 2021 Suppose my friend gifts me a 15 lakh car toh me.. do i have to pay tax in Incometax on that gift..? But in the section of gift tax there is not mention of car in that list

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

06 April 2021 Yes, income tax payable. Transfer of assets without adequate consideration treated as gift and taxable.

RAVI SAINI

RAVI SAINI (Querist)

06 April 2021 Suppose i go holiday with my freind and he pays all my expense of my trip and he give me this trip as a gift..
So then on that trip Incometax is also payable..? Bcz he give me that trip as a gift to me

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

06 April 2021 Upto 50,000 gift not taxable.

RAVI SAINI

RAVI SAINI (Querist)

09 April 2021 But gift list is exhuastive in Incometax act... does it include value of all gifts received

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

09 April 2021 See the link..
https://www.google.com/amp/s/taxguru.in/income-tax/detailed-analysis-gifts-taxation-income-tax-act-1961.html%3famp

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