Violation of Section 269ST

A product worth rs is 2,50,000.

1. Can i pay 1,90,000 in cash and 60,000 in cheque?

2. Can seller receive 1,90,000 in cash and 60,000 in cheque?

If i do so, will i violet any penalty? or will the seller violet any penalty?
Replies (3)
Quick Summary
This discussion clarifies the implications of Section 269ST of the Income Tax Act regarding cash transactions. It addresses whether paying or receiving ₹1,90,000 in cash and ₹60,000 by cheque for a product worth ₹2,50,000 violates the law. The consensus is that while the seller might violate Section 269ST if the total cash received exceeds ₹2 lakh, the buyer could face issues under Section 40A(3) for cash payments. It's advised to avoid transactions close to the limit to prevent scrutiny from the Income Tax Department.

The seller will violate sec 269 ST and the buyer will violet sec 40A(3) IT dept will send notice if they find this case.
But in 269 to be violated the first condition is if you pay 2 lakhs or more. here i pay 195000 cash
Receiving near to the limit wont attract any penalty as the sellar can recive upto 200000 but i wont suggest that as this will attract eyes of AO for future.

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