Under Section 269ST of the Income Tax Act, no one can receive cash for more than two lakh rupees from a person in a day during a single transaction or transactions relating to one event or occasion.
However, the transaction of an amount equal to ₹2 lakh or more is allowed through an account payee cheque or an account payee bank draft or the use of an electronic clearing system (ECS) through a bank account. ECS through a bank account, as mentioned above 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), and BHIM (Bharat Interface for Money) Aadhar Pay. Payment of an amount of ₹2 lakh or more is allowed via any of these mediums as stated above.
What will happen if you receive cash for more than rupees 2 lakh?
Since the demonetization, we have witnessed a lot of changes in the income tax system of India. Initially, the common people of India had face a lot of trouble.
Have you ever think of if you receive cash for more than rupees 2 lakh, what will happen? If you received any sum of rupees 2 lakh or more from a person in a single day, you’re liable to pay a penalty of a sum equal to the amount of such receipt under section 271DA.
But, it is also possible to receive the amount if you can prove it with sufficient reasons for the contradiction. In such a case, no penalty will be imposed on you.
Exemptions to Section 269ST of the Income Tax Act
Section 269ST of the Income Tax Act does not apply to any receipt of amount by the government, any banking company, post office savings bank, or co-operative bank.
Source – LiveMint