Clarification on Cash Receipt of Rs. 2 Lakh or More w.e.f. 01.04.2017

Clarification on Cash Receipt of Rs. 2 Lakh or More w.e.f. 01.04.2017

Finance Bill 2017 proposed to insert sec. 269ST in the Income Tax Act to provide that no person shall receive an amount of Rupees 2 Lakh or more w.e.f. 01st April, 2017:

  • in aggregate from a person in a day;
  • in respect of a single transaction; or
  • in respect of transaction relating to one event or occasion from a person,

other-wise than by an account payee cheque or account payee bank draft or electronic clearing system through a bank account.

Meaning of Sec. 269ST

1. in aggregate from a person in a day

If a person received sum of Rs. 2.15 Lakh in cash for different bills or Rs. 1 Lakh and Rs. 1.15 Lakh, then penalty is levied.

2. in respect of a single transaction; or

If there is a single bill of Rs. 2.50 Lakh and a person received cash on different days of Rs. 1.20 Lakh and Rs. 1.30 Lakh, then also penalty is levied.

3. in respect of transaction relating to one event or occasion from a person,

If marriage is one occasion and a person receives sum of Rs. 2.75 Lakh for the said occasion the penalty is levied.

4. Withdrawal of amount from own bank account.

If a person withdraws in a day amount of Rs. 2 lakh or above, the penalty is not levied; as per Press Release issued by CBDT dated 5th April, 2017

5. To whom does section 269ST applies?

To any person receiving cash above Rs. 2 Lakh, except Government, banking company, post office savings bank or co. operative bank.

6. Whether penalty is applicable for regular receipts only?

Any type of amount or Rs. 2 Lakh or above received in cash whether capital or revenue nature, irrespective of purpose of accepting amount i.e., whether business purpose or personal purpose or as trustee, custodian etc. Sec. 269ST is applicable.

7. What is the Penalty for Contravention of Section 269ST?

100% penalty on receiver of amount.