Herein, the word \u201cSpecified sum\u201d means the amount receivable, in\u00a0relation to\u00a0transfer of an immovable property, whether actually transferred or not.<\/li>\n<\/ul>\nConsequences for Non-Compliance<\/strong><\/span><\/p>\n\n- If any loan or deposit or specified sum is accepted in contravention of Section 269SS then a penalty\u00a0adequate to\u00a0the quantity\u00a0of such loan or deposit or specified sum shall be levied u\/s 271D.<\/li>\n<\/ul>\n
<\/span>Disallowance On Repayment of Loan In Cash<\/strong><\/span><\/span><\/h3>\n![\"Disallowance](\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/10\/Disallowance-On-Repayment-of-Loan-In-Cash..png\")
<\/p>\n
\n- No person, including banks, co-operative banks, companies etc., would be allowed to make the repayment of their loan or deposit or any specified advance received, in cash in excess of Rs. 20,000.<\/li>\n
- Herein, the word \u201cSpecified Advance\u201d means any amount receivable, in relevancy to transfer of an immovable property, whether actually transferred or not.<\/li>\n<\/ul>\n
Consequences for Non-Compliance<\/strong><\/span><\/p>\n\n- If any loan or deposit or specified sum is repaid in contravention of Section 269T then a penalty\u00a0adequate\u00a0the number\u00a0of such loan or deposit or specified sum shall be levied u\/s 271E.<\/li>\n<\/ul>\n
<\/span>NON-APPLICABILITY OF SECTION 269SS AND 269T<\/strong><\/span><\/h3>\n![\"NON-APPLICABILITY](\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/10\/NON-APPLICABILITY-OF-SECTION-269SS-AND-269T..jpg\")
<\/p>\n
However, provisions of Section 269SS and 269T\u00a0don’t seem to be\u00a0applicable loans or advance or specified sum is received from or repaid to:<\/p>\n
\n- Government;<\/li>\n
- Banking company, post office savings bank or co-operative bank;<\/li>\n
- Corporate entity, established by Central, State or Provincial Act;<\/li>\n
- Government company, being defined in section 617 of the Companies Act, 1956;<\/li>\n
- Any other institutions, associations or bodies or class of institutions, associations or bodies, being notified by Central Government from time to time.<\/li>\n<\/ul>\n
<\/span>Disallowance on Receipt of Amount In Cash<\/strong><\/span><\/span><\/h3>\n![\"When-to-say-NO-to-CASH..\"](\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/10\/When-to-say-NO-to-CASH...jpg\")
<\/p>\n
Section 269ST clearly provides for disallowance of receipt of amount received in excess of Rs. 2,00,000 in cash, in respect of following transactions:<\/p>\n
\n- In aggregate from\u00a0someone\u00a0in an exceedingly\u00a0single day. It includes any amount received from\u00a0an individual\u00a0during a\u00a0single day\u00a0no matter\u00a0the actual fact\u00a0that such amount is received in multiple instalments\u00a0in an exceedingly\u00a0day or received against multiple invoices.
\n\u2022 In respect of\u00a0a particular\u00a0transaction.
\n\u2022 Transactions involving any particular event or occasion from an individual.<\/li>\n<\/ul>\n<\/span>Non-Applicability of Section 269ST<\/strong><\/span><\/span><\/h3>\n![\"Non-Applicability](\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/10\/Non-Applicability-of-Section-269ST...jpg\")
<\/p>\n
The provision of section 269ST would not be applicable to following entities –<\/p>\n
\n- Any amount received by\u00a0the govt.\u00a0or any\u00a0banking company, co-operative bank or, post office saving bank.
\n\u2022 Transaction of\u00a0the character\u00a0which are\u00a0laid out in\u00a0section 269SS (Mode of taking or accepting certain loans, deposits and specified sum)
\n\u2022 Certain specified persons, as may be notified by the Central Government.<\/li>\n<\/ul>\nPenalty\u00a0Consequences for Non-Compliance<\/strong><\/span><\/p>\n\n- The government provides for hefty penalty, being leviable on persons not complying with the provisions of section 269ST.<\/li>\n
- If any individual receipts amount in contravention of provisions of Section 269ST then a penalty corresponding to the amount received in cash shall be levied u\/s 271DA.<\/li>\n<\/ul>\n
<\/span>Audit Aspect on cash transaction\u00a0<\/span><\/span><\/h3>\n\n- Under Section 44AB of\u00a0income tax\u00a0Act,\u00a0every one, whose total sales, turnover or gross receipts in business exceeds INR 1 Crore in any previous year then\u00a0he’s\u00a0required\u00a0to induce\u00a0his accounts audited under section 44AB of\u00a0taxation\u00a0Act.<\/li>\n
- However, where a person satisfies the below mentioned conditions, then the limit of Rs. 1 Crore would be increased to Rs. 10 Crores\n
\n- Aggregate of all amounts received during the year in cash, including amount received for sales,\u00a0doesn’t\u00a0exceed 5% of the said amount and<\/li>\n
- Aggregate of all payments made in cash during the year, including amount incurred for expenditure, in cash,\u00a0doesn’t\u00a0exceed 5% of the said payment.<\/li>\n
- Hence, where the aggregate of receipts and expenditure, being received in case, exceeds 5% of total receipts and expenditure, then the exemption limit for Audit would be Rs. 1 Crore.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
<\/span>TDS Implications on Cash Withdrawal<\/strong><\/span><\/span><\/h3>\n![\"Bank-Post-offices-required-to-deduct-TDS.\"](\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/10\/Bank-Post-offices-required-to-deduct-TDS..jpg\")
<\/p>\n
\n- To discourage cash transactions,\u00a0the govt\u00a0has introduced\u00a0a replacement\u00a0section 194N wherein if\u00a0an individual\u00a0withdraws aggregate cash exceeding INR 1 Crore during the year from his one or multiple\u00a0bank account\u00a0then Bank (Private or Public Sector), a co-operative Bank or a post office shall deduct TDS @2% on amount withdrawn in\u00a0far more than\u00a0INR 1 Crore.<\/li>\n
- However, the provisions of Section 194N would not be applicable to the following –<\/li>\n
- the Government;<\/li>\n
- Banking concern\u00a0or co-operative society, being engaged in in the business of banking or a post office;<\/li>\n
- Business correspondent to that of a\u00a0banking company\u00a0or co-operative society, being carrying out activities in accordance with\u00a0the applicable rules;<\/li>\n
- any white label ATM operator of a banking concern or co-operative society engaged in carrying on the business of banking, in accordance with the authorisation issued by the reserve bank of India.<\/li>\n<\/ul>\n
<\/span>Prohibited Deduction Under Chapter-V<\/strong><\/span><\/span><\/h3>\n\n- Payment for Health Insurance Premium<\/li>\n<\/ol>\n
\n- \n
\n- As per Section 80D, for\u00a0the aim\u00a0of claiming deduction from Gross Taxable Income, assessee is required\u00a0to form\u00a0payment of medical premium or other eligible deductions u\/s 80D in any mode\u00a0aside from\u00a0cash.<\/li>\n
- It is to be noted, that only the payments for preventive health check-ups would be allowed to be made in any mode including cash.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
\n- Donations made in cash<\/li>\n<\/ol>\n
\n- \n
\n- Deduction for donations u\/s 80G shall be allowed\u00a0providing\u00a0payment of donations are made in any mode\u00a0aside from\u00a0cash.<\/li>\n
- No deduction shall be allowed in respect of donation of any sum exceeding INR 2,000 unless such sum is paid by any mode apart from cash.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
<\/span>CONCLUSION<\/strong><\/span><\/span><\/h3>\n\n- Government of India introduced various rules and provisions, in order to tackle down the tax evasion activities and to make Indian economy grow with the correct use of its finances.<\/li>\n
- The above provisions are introduced as\u00a0a tenet\u00a0that each\u00a0taxpayer is required to\u00a0fits\u00a0all the provisions of the\u00a0tax\u00a0Act for better and clean books of accounts.<\/li>\n
- It has been provided that the entities, complying with all the provisions, would be able to reap many benefits, in terms of deductions, better planning of future, and no legal disputes.<\/li>\n
- Also, a taxpayer is advised to maximize their digital transaction\u00a0instead of cash transactions, in order to curb down the black money and increase the efficiency of their own working.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"
Implication of Cash Transaction Under Income Tax Act, 1961 BRIEF INTRODUCTION Over the years there\u00a0are\u00a0lots\u00a0of changes\u00a0happening\u00a0in terms of advancement and digitization\u00a0within the\u00a0business world. Digitization provides convenience and ease in doing business, along with, provides for keeping a check\u00a0on the black money circulation, being practiced by many.\u00a0Evasion\u00a0practices or transactions in black money markets mostly\u00a0happen\u00a0in cash and …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[142],"tags":[863],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/4011"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=4011"}],"version-history":[{"count":3,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/4011\/revisions"}],"predecessor-version":[{"id":4488,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/4011\/revisions\/4488"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=4011"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=4011"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=4011"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"Implication](\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2021\/10\/Implication-of-Cash-Transaction-Under-Income-Tax-Act..jpg\")
<\/p>\n