Cash received against sale of agriculture land by farmer

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Receiving cash for agricultural land sales, especially above certain limits, can breach Income Tax rules like Section 269SS, which restricts cash transactions over £2,000. While there are exceptions for farmers under specific conditions, such as both buyer and seller having agricultural income and no taxable income, these may not apply to land sales. It's crucial to understand the implications and potential penalties.

yogesh mahajan

yogesh mahajan (Querist)
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07 July 2021 Dear experts,
MY RELATIVE IS Farmer and having agriculture land at Maharashtra now he want to sale this land and approx value is 21 lakh but buyer paid this amount in cash. As per above situation it's violation of income tax rule 269SS for cash transactions above 2 lakh. Also please tell income tax provisions in above suituation.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 July 2021 The limit is 20,000. Penalty of equal amount leviable.

yogesh mahajan

yogesh mahajan (Querist)
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08 July 2021 Thanks sir,
If saller and buyer both are farmer than rule 269ST of income tax applicable for cash more than 2 lakh.

Deepa B

Deepa B (Expert)
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08 July 2021 Please check whether your relative is covered under the proviso for the section. It says if both buyer and seller have agricultural income and both of them don't have any income chargeable to tax under the Income tax Act, then this section doesn't apply to him/her.
The receipt described in the section relates to the term "specified sum" as it is neither a loan nor a deposit. The term "specified sum" covers receipts in relation to transfer of an immovable property.
"specified sum" means any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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08 July 2021 That's for agricultural produce sales.
your query related to sale of agricultural land for which section 269SS only applicable. No relaxation.

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