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Receipt of Rs. 2.00 lakh in cash by business entity

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Imran Anim

Business

32 Points Posted on 08 September 2020

Hi.
I had a discussion with a finance expert regarding limit of receipt of cash by business firm. His arguement is that a business firm cannot receive 2.00 lakh or more in an year from a single customer as per GST Act 2017 and IT Act. But I have come to know from many sources that a business entity can receive upto Rs 1,99,999/- cash in a day from a single person per transaction. Please clarify is there a y rule as per GST Act or IT Act which says that from each customer, firm cannot receive more than Rs 2.00 lakhs in a year.

Will be thankful if someone clarifies.

Replies (3)

Quick Summary

This discussion clarifies the rules around receiving cash payments in a business. It addresses the common misconception about an annual limit, explaining that the Income Tax Act (Section 269ST) restricts cash receipts to under Rs 2 lakh per person, per day, or per single transaction/event. While there's no specific annual limit imposed by GST or IT Act for cash received from a single customer, exceeding Rs 1,99,999 in a single day or transaction will incur penalties.

Aman Verma

209 Points Posted on 08 September 2020

As per section 269 ST a person cannot receive more than 200000 from a single person in a day there is a limit on a day not on yearly according to IT act

Sagar Patel

Tax and Business Consultant

11616 Points Posted on 08 September 2020

Section. 269ST of IT Act, 1961. No person shall receive an amount of two lakh rupees or more in cash—
(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..