Cash transaction

Section 269ST of IT act, restricts cash receipts of Rs. 2 lakhs and above from any single person per day or per bill.

From different persons below 2 lakhs from each; no restriction.

sir, rupees 2lacs shall be counted on daily basis ?? bcz in some forum it says in a whole financial year sale to a single person  is Rs. 2 lacs... pls clarify... thanks

" it says in a whole financial year sale to a single person  is Rs. 2 lacs..."

Correct interpretation should be " it says in a whole DAY sale to a single person  is Rs. 2 lacs.."

Aggregate Cash receipt/s on any day from any single person or any bill amount should not be 2 lakhs or more.

The said transactions did not require aggregation and the reporting requirement under SFT for this purpose is on receipt of cash payment exceeding rupees two lakh for sale of goods or services per transaction," the CBDT said in a statement. 
 

That is clear the limit of Rs. 2L will apply transaction wise.

@ priyal... U means We can sale Product X to M/s ABC in Cash on Agst Invoice No. 1 Day 1 - 1.90 Lacs , Invoice No. 2  Day 2 1.90 Lacs , & collect Cash ... Will it be Fine  to classify as Transaction wise.....

I doubt on this

The section says transaction wise.

For Example:

In case of sale of a jewellary piece from A to B, this will be a single transaction and one cannot sell Half necklace today and half tomorrow. So one bill should be issued. 

In case total value of the necklace is 3.5LPA then one has to receive the payment through Bank Channel only.

In case of retail sales, it is quite possible that different lots are sent on a daily basis. You can receive the payment for any transaction below 2L in a day from a single person.

But it should be kept in mind one cannot receive the payment of more than one transaction(relating to different days) from a single person on a single day exceeding 2L.

As there are 2 limbs of section 269ST:

1. Clause (a) of section 269ST: One can not receive payment from a single person > 2L on a single day :

There is a single payer
Payment of more than 2 L

The payment is made on a single day

2. Clause (b) of Section 269ST: In respect of a single transaction

The second limb operates so as to ignore the number of days over which a transaction is spread. If there is a single transaction, and the payment in respect thereof is scattered over several days, then the section is attracted if the aggregate of the amounts reaches the threshold. Hence, the pre-requisites for the section are:’’

• There is a single receiver
• There is a transaction to which the payments relate
• The total amount of cash paid, whether in one day or multiple days, adds to Rs 2 lacs or more

Here, the crucial point will be what is a one single transaction. The intent of the lawmaker is not to aggregate several transactions, which are naturally segregated. The intent of the law is to anti-avoidance. If the parties are so splitting their payments, such that one transaction is given effect to over multiple days, merely to get rid of the section, the section will defeat such an intent.

For instance, if there is an invoice of Rs 3 lacs, which is paid over three tranches, over 3 days, all in cash, the section is getting attracted.

3. Clause (c) of 269ST: From a person in respect of one event or ocassion

• There is a single receiver
• There is one single event or occasion to which the transactions relate
• These transactions may be spread over one or several days

• The total amount of cash paid, whether in one day or multiple days, adds to Rs 2 lacs or more

However the word one event or ocassion is not defined by the CBDT.

In respect of Your query, if the transaction is not naturaly segregated and the sale of product X on two different invoices on two different days is made to avoid section 269ST.

It is not permitted and will be covered in clause (b) of section 269ST.