New Delhi: In order to curb tax evasion in the country, under Section 269ST, the Income Tax Act restricts any person from receiving an amount of Rs 2 lakh or more in cash, from a person, in respect of a single transaction or in respect of transactions relating to one event.
If someone who owes you money decided to settle the debt by paying the borrowed amount where the value is above Rs 2 lakh, as per guidelines, you are liable to pay penalties which is 100% of the entire amount of cash received.
However, the transaction of an amount equal to Rs 2 lakh is allowed through an account payee cheque or an account payee bank draft or use of Electronic Clearing System (ECS) through a bank account.
ECS through a bank account includes payment through credit card, debit card, net banking, IMPS (Immediate Payment Service), UPI (Unified Payment Interface), RTGS (Real Time Gross Settlement), NEFT (National Electronic Funds Transfer), BHIM (Bharat Interface for Money), and Adhar Pay.
The payment of Rs 2 lakh is allowed via any of the above-mentioned methods.
Any person who receives a receipt of Rs 2 lakh via cash is liable to pay a penalty of a sum equal to the amount under Section 271DA.
The penalty shall be imposed by Joint Commissioner.
As per section 269ST, any person who enters into a transaction of Rs 2 lakh or above in cash will be liable of a penalty of an amount equivalent to the amount of transaction.
However, the Income Tax Act or Section 269ST does not apply to any receipt of amount by the government, any banking company, post office savings bank or co-operative bank.
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