Cash Transaction Limit

Pls. advice can one party accept cash exceeding Rs. 2 lacs in one financial year from a single party (B2B transaction) ?
Cash is being received on different dates which is less than 2 lacs
Replies (8)

RS 2 LAKH PER INVOICE PAYMENT RECEIVED 

invoice amount is Rs.600000 and cash is being received on different dates !
Sec 269st is levied if Bill value exceed 2lakhs. Better to receive Bank mode

'269ST. Mode of undertaking transactions.—No person shall receive an amount of two lakh rupees or more—

(a)   in aggregate from a person in a day; or
(b)   in respect of a single transaction; or
(c)   in respect of transactions relating to one event or occasion from a person,

otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account:

Explanation:

(a) "in aggregate from a person in a day" - Amount received for single/Multiple invoices in a single day from a single person- Maximum 2 lakhs

(b) "in respect of a single transaction" - Single Invoice value more than 2 lakhs - Maximum amount that can be received for that invoice in cash is Rs.2 lakhs (Day limit to be kept in mind, if entire 2 lakhs is received in one day then for that invoice, then no money shall be received in cash for any other invoices in that same day from that party)

(c) "in respect of transactions relating to one event or occasion from a person" - For example a event in conducted which involves multiple activities like Food, decoration, etc. All together exceeds 2 lakhs but each activity is billed below 2 lakhs. Sill it will be considered as single event/invoice. So point (b) applies here.(To avoid splitting of invoice)

Hope this is clear. 

Originally posted by : Sumit Kr. Lohani
invoice amount is Rs.600000 and cash is being received on different dates !

You can receive a maximum of Rs.2 lakhs only in cash for that invoice. Section 269ST sub clause (b).

ok...what if I billed 10 invoices to one party in entire financial year amounting to RS. 190000 each and receiving the payment in cash in part. Will it attract 269st ?

No it will not attract 269ST unless its covered under sub clause (c), that is your voluntarily splitting a invoice of a single event/occasion into multiple invoices judt to avoid the section.

Originally posted by : Sumit Kr. Lohani
ok...what if I billed 10 invoices to one party in entire financial year amounting to RS. 190000 each and receiving the payment in cash in part. Will it attract 269st ?

 

https://indiataxguide.in/blog/income-tax/section-269st-cash-transactions-examples/

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