Understanding section 269st

If it is cash receipts in connection with your business supply, then yes, But if anything like loan... then No.

Online you can receive cash .

There are some exception to this section.

As per Section 269ST, cash receipt of ₹2 lakh or more is restricted per person.

You cannot receive ₹2 lakh or more in cash:

• From a single person in a day, or

• For a single transaction, or

• For one event/occasion from a person.

However, you can receive cash from multiple persons in a day, provided amount from each person is less than ₹2 lakh.

Section 269ST restricts receipt of ₹2 lakh or more in cash in three situations: (1) from a single person in a day, (2) for a single transaction, or (3) for transactions relating to one event or occasion from a person. If violated, penalty under Section 271DA can be equal to the amount received.

The limit applies to the receiver, not the payer. Payments through banking channels (account payee cheque, draft, electronic modes) are allowed. Certain exceptions exist, like government, banking companies, and notified persons.

If you’re unsure whether receipts fall under “single transaction” or “one event,” document invoices clearly and avoid splitting cash artificially. When in doubt, route payments digitally to stay compliant and reduce penalty risk.

Read sec 269st

And allied provisions.

Section 269ST prohibits RECEIVING cash of Rs 2 lakh or more in THREE scenarios:

SCENARIO 1: From a single person in a single day , Even if the person makes 5 payments of Rs 50,000 each across the day, if the total from that one person crosses Rs 2 lakh, you as the RECEIVER are in violation.

SCENARIO 2: In respect of a single transaction , One transaction (e.g., one sale of goods) cannot be split across multiple days to avoid the limit. If the underlying transaction value is Rs 2 lakh+, ANY cash received against it (even in installments) triggers 269ST.

SCENARIO 3: For transactions relating to one event or occasion , This is the broadest catch-all. Receiving cash across multiple vendors/days for the same event (wedding, party, construction project) is treated as a single occasion.

KEY POINTS:

• The RECEIVER (payee) faces penalty, not the payer
• Penalty: 100% of the cash received (Section 271DA)
• Exceptions: Receipts from Government, banking companies, cooperative banks, post offices
• Does NOT apply to repayment of loans (Section 269T applies for that)
• Different from 269SS (which covers acceptance of loans/deposits above Rs 20,000 in cash)

DOCUMENTATION DEFENSE: If there is no malafide intention and the transaction is fully reflected in books, courts have granted penalty relief , but this is discretionary, not automatic.

For the full breakdown with penalty comparison table and case law references: [Cash Transaction Limits: Sections 269SS, 269T, 269ST Penalties India](https://taxgarden.in/blog/cash-transaction-limits-269ss-269t-269st-penalty-india)