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Exprt help needed regarding cash receiving

Martin King (Director) (81 Points)

05 July 2013

Hello Experts,

I am about to get 20 Lakhs from a person (female and outsider). There is no business deal between us and hence there is no transfer of items or property. Even though the source of funds is legit and white but still due to some personal family reasons I want to receive that money as Cash. How will she be be taxed ? And is it legal to take cash of such amount?

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8 Replies

(Guest)

There is no business deal, sale, purchase .. is it as loan or gift?

shivaji prasad bhimavarapu (CHARTERED ACCOUNTANT) (2391 Points)
Replied 06 July 2013

No loan can be taken in Cash-U/s269 SS. She is an outsider- does it mean she is NOT related to you or NRI. Gifts received from NON relatives are taxable under Income from other sources.

Mihir (Wealth Manager) (5293 Points)
Replied 06 July 2013

Gift received not from a relative is taxable. Incase you are required to go through this cash transfer, then you cannot deposit this cash in the bank. You will have to keep it in the bank locker.

Martin King (Director) (81 Points)
Replied 06 July 2013

She has some FDs which will be Gifted to me and she is an Indian Citizen (non NRI). What are the various ways to recieve and keep that amount ? How will she be taxed and can I deposit that cash in to my bank account ?

(Guest)

If she is not your close relative the FDs or the cash you receive will be taxed in your hands as your income in that year. If you are paying tax on it there is no reason why you should not deposit it in bank.

As you have mentioned that the source of the money is legit (assuming she filed a return and that money has been taxed for earlier years) she will not be taxed for it now for gifting it to you.

Aman Verma (209 Points)
Replied 05 September 2020

Firstly if she falls under relative definition of IT act then it will be exempted otherwise the amount is taxed in tha hands of the receiver so it will be clubbed in your hands in Income From Other Sources .
As you said she has some FDs you can get that amount by telling her to break the FD and make a short term FD in your nam for 10-15 days FD then after it get matured you can withdraw the amount and this takes into consideration all the laws related to receiving cash , i feel this is the safest option .
hope it helped

Avtar Singh (363 Points)
Replied 05 September 2020

Loan thorough banking CHANNEL is the only way

rama krishnan (12234 Points)
Replied 07 September 2020

If any loan or advance or any specified amount received in cash exceeding 20000, it violates section 269ss. if any person receives any sum in cash exceeding 2 lakhs, provision 269ST will be attracted. in addition, since the payer is not a relative, the same amount will be charged under section 56(2)(x)