What is the limit of cash transactions in a day? Know what is the limit and when you can get an income tax notice

Cash transactions limit: In a country like India, people use a large number of cash, due to which the problem of black money has been a matter of concern for a long time. Large cash transactions promote transparency decrease and tax evasion. Keeping this problem in mind, the Government of India and Income Tax Department have implemented strict rules regarding cash transactions.

receives a cash amount

Under Section 269ST of the Income Tax Act, if a person receives a cash amount of Rs 2 lakh or more in a single day, he can be fined under the Income Tax Act. Today, in this article, we are going to tell you in detail about the maximum limit of cash transactions limit, when the Income Tax Department keeps an eye on the cash transaction and what kind of cash transactions keeps an eye on it.

Income Tax Act

The Government of India added a new rule to the Income Tax Act through Finance Act 2017 to stop black money and bring transparency in cash transactions, called Section 269ST. Under this section, it is illegal to take money in more cash than a fixed limit. According to section 269st, no human can take more than Rs 2 lakh in cash form on the day of a human being. This limit is applied in three situations.

limit is applied in three situations

If a person receives cash from the same person at once or several pieces in a single day.
If any purchase or payment of more than 2 lakh in a day is through cash amount.
The total amount of money received from the same person in a wedding or function is 2 lakh or more.
If the cash amount received in this way is more than 2 lakhs, then you may have to pay the amount as a fine to the government.