Quick Summary
In a move aimed at promoting transparency and discouraging the use of cash transactions in financial dealings, the Income Tax Department has recently released an informative E-Flyer. This E-Flyer meticulously outlines the cash transaction limits and underscores the substantial consequences associated with specific types of cash transactions. Cash transactions have long been a subject of scrutiny by tax authorities due to their potential to facilitate tax evasion and illicit financial activiti
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FAQ :
You cannot accept Rs. 20,000 or more in cash for any loan or deposit, or for any amount related to the transfer of immovable property. This limit also applies to outstanding amounts plus subsequent cash receipts.
If you violate the limits for accepting loans or deposits in cash, a penalty equal to the amount taken in cash will be levied.
You are not allowed to receive Rs. 2,00,000 or more in cash from a person in a single day, for a single transaction, or relating to one event or occasion.
Yes, exceptions apply for receipts from the Government, banking companies, post office savings banks, co-operative banks, certain corporations, and specified institutions. Individuals with agricultural income, where neither party is chargeable to income tax, are also exceptions for certain loan/deposit provisions.
If a business incurs expenditure where a payment or aggregate of payments in cash exceeds Rs. 10,000 in a day, 100% of that payment will be disallowed when calculating taxable income.
Cash donations made to a registered trust or political party exceeding Rs. 2,000 are not allowable as a deduction under Section 80G.
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