Newly added High-Value Transactions threshold limits
Table of Contents
Newly added High-Value Transactions threshold limits
Income Tax Cash Transaction Rules & Regulations
Section 269ST – Restriction on Cash Transactions
No person can receive ₹2 lakh or more in cash: In a single day from one person. and For a single transaction, even if received on different days. also For multiple transactions related to a single event or occasion. If violated, the recipient (not the payer) faces a penalty equal to the amount received under Section 271DA of the Income Tax Act.
Monitoring of High-Value Cash Transactions
The Income Tax Department tracks large cash transactions, and exceeding prescribed limits may lead to scrutiny or notices. Some key limits include Cash deposits of ₹10 lakh or more in savings accounts per financial year, Cash deposits/withdrawals of ₹50 lakh or more in a current account per FY and High-value transactions (₹2 lakh+) for property purchases, jewelry, medical expenses, etc.
| S. No | Transaction Type | Min. Amount (Rs.) |
| 1 | Domestic class Air travel / Foreign travel | any |
| 2 | Deposit / Credits in non-current Accounts | 25 Lakhs |
| 3 | Health Insurance premium | 20,000 |
| 4 | Electricity Consumption per year | 1 Lakh |
| 5 | Share transactions in DMAT Accounts / Bank Lockers | any |
| 6 | LIC | 50,000 |
| 7 | Purchase of Jewelry, white goods, painting, marble, etc | 1 Lakh |
| 8 | Payment of educational fee/donations | 1 Lakh |
| 9 | Payment to Hotels | 20,000 |
| 10 | Deposit / Credits in Current Accounts | 50 Lakhs |
| 11 | Payment of Property tax per annum | 20,000 |
Additional threshold limits added to enforce the Income-tax
- Deduction/tax collection provision at a higher rate for no tax return filers.
- Compulsory returns for taxpayers Provision
-
- All professionals with sales above Rs. 50 Lakh
- All whose rental payment exceeds Rs. 40,000 a month
- Which transactions are above Rs. 30 lakh
Exceptions to Section 269ST
- Certain entities are exempt from this restriction, including: Govt entities, banks, post offices, and co-operative banks. & Transactions specified under other laws (e.g., agricultural produce sales).
- Avoid high-value cash transactions to prevent penalties and scrutiny. use banking channels (cheques, demand drafts, or digital transfers) for large transactions. maintain proper records for cash receipts to justify them if questioned by tax authorities.
A few tips for avoiding high-value financial transactions with Income tax notices:
- Stay up to date with your PAN details.
- Reveal in your ITR all and correct revenue you have earned during the FY.
- Before the deadline, you must always file your ITR.
- Cross-check your From 26AS for all the TDS entries. This exercise can be repeated once a quarter.
- If any AIR transactions are reported, check your Form 26AS.
- Record all your valuable financial transactions, investments and expenditures
Comparison: Cash vs. Credit Transactions
| Feature | Cash Payment | Credit Transaction |
|---|---|---|
| Timing | Immediate | Deferred |
| Intermediaries | None | May involve banks or payment systems. |
| Flexibility | Limited by on-hand cash | Provides flexibility to pay later. |
| Record Keeping | Requires manual entry | Automatically recorded in accounts. |
Fake donations to parties
Recent concerns about fake political donations, tax loopholes, or money laundering through political funding?
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