Master in Accounts & high court Advocate
9610 Points
Joined December 2011
Receiving cash gifts totaling ₹9,00,000 in a day from six relatives, with each giving ₹1,50,000, does indeed violate Section 269ST of the Income Tax Act. This section prohibits receiving cash of ₹2 lakh or more in a single day from a single source, whether as a single transaction, aggregate transactions, or transactions related to one event or occasion.¹ ² In this scenario, each relative's contribution of ₹1,50,000 exceeds the ₹2 lakh limit when aggregated with the others, and since the purpose is for X's mother's medical treatment, it's considered a single occasion. Violating Section 269ST can lead to penalties equal to the amount received in cash, which in this case would be ₹9,00,000. However, it's worth noting that gifts received from relatives may be exempt from tax under certain conditions, but this exemption doesn't apply to the provisions of Section 269ST. To avoid such penalties, it's advisable to explore alternative modes of receiving these gifts, such as through bank transfers or cheques.