CASH PAYMENT 20K IN SALE OF LAND

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This discussion addresses the legality of making a cash payment of INR 20,000 in a land sale, where the amount is split among four sellers at INR 5,000 each. While Section 269T of the Income Tax Act restricts cash payments, it may be permissible if paid to different individuals. To avoid future queries, it's advised to record payments slightly below the threshold, such as INR 4,999 per seller, alongside the DD payment.

Dibyendu Majumder

Dibyendu Majumder (Querist)
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01 May 2023 My client is a real estate developer & going to purchase land, in which party asks him to pay INR 20000.00 in cash and the rest of the consideration amount in DD (A total 5 parties involved in the purchase, 1 party fully paid by DD and the rest of 4 parties demanded INR 5000/- X 4), Is any restriction applicable u/s 269S, 269T or any other rule to pay this cash & record in memo page of deed?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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01 May 2023 For you, payment of specified amount is restricted to Rs. 20000/- under sec. 269T of IT act.
But considering it being paid to different persons, it will be allowed.

Dibyendu Majumder

Dibyendu Majumder (Querist)
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01 May 2023 Sir, In this case, 4 Parties demanded INR 5000 each, a total of INR 20000.00 in the purchase of a single piece of land, which will be registered by a single deed. Is the purchaser will free to mention the cash INR 5000 X 4 and 1 account payee DD given to the parties in the consideration memo page?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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01 May 2023 To avoid any future query, better to mention Rs. 4.999/- * 4 to each payee.

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