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In this article we elaborate section 269ST of IT Act, in respect of Cash Transaction provisions applicable from 01-Apr-2017 on wards with examples.

Point No. 1. From which date this section is applicable?

This section applies from 01/04/2017 (F.Y.2017-18 onwards)

Point No. 2. What are the provisions of Section 269ST?

Finance Bill 2017 proposed to insert section 269ST in the Income Tax Act to provide that no person shall receive an amount of Two lakh rupees or more,—

(a) in aggregate from a person in a day;

E.g. if a person receives Rs.2.25 lakhs in cash for 2 different bills of Rs.1 lakh and 1.25 lakh, then also penalty is levied.

(b) in respect of a single transaction; or

E.g. if there is single bill of Rs.3.10 Lakh and cash is received on different days of Rs.1.6 lakh and Rs.1.5 lakh, then also penalty is levied.

(c) in respect of transactions relating to one event or occasion from a person,

E.g. if marriage is one occasion and a person receives amount of Rs.3,00,000/-. Thus penalty is levied of 100% of amount received.

other-wise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account.

(d) withdrawal of amount from own bank account 

E.g. if a person withdraws in a day amount of Rs.2 lakhs or above, then penalty is levied.

Point No. 3. To whom does Section 269 ST applies?

To any person receiving cash above Rs.2 lakh.

Point No. 4. For which transactions is Section 269ST not applicable?

Restriction on cash receipt of Rs.2 Lakh or more w.e.f 01.04.2017 shall not apply to
– Government, any banking company, post office savings bank or co-operative bank.
– Transactions of the nature referred to in section 269SS;
– Such other persons or class of persons or receipts, as may be specified by the Central Government by   notification in the Official Gazette.

Point No. 5. Whether penalty is applicable for regular receipts only?

Any type of amount of Rs.2 Lakh or above received in cash whether capital or revenue in nature.

Point No. 6.  Whether exempt income is covered under Section 269ST?

Both taxable and exempt incomes are covered in Section 269ST.

Point No. 7. If the amount is received for personal purpose, whether 269ST is applicable?

Irrespective of purpose of accepting amount i.e., whether business purpose or personal purpose or as a trustee, custodian etc. section 269ST is applicable.

Point No. 8. What is the Penalty for Contravention of Section 269ST?

100% penalty on receiver of amount.

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16 thoughts on “Section 269ST – Cash Transactions with Examples

  1. M N Adiseshaiah says:

    IN POINT NO 2 D) IN SECTION 269ST WITHDRAWL FROM BANK EXCEEDING Rs.2,00,000 you have stated penaltyis levied I think it is not correct for banks and post offices etc. this section is not applicable. confirm

    1. admin says:

      Thanks for your notation
      This article was posted before clarification by the department.As per CBDT notification the provisions u/s 269ST relating to penalty for Cash withdrawal transactions with bank/ co-op. bank/ post office savings bank above Rs. 2 Lac. Now such transactions are not subject to penalty as per the Notification dt. 5 Apr. 2017.

      Regards
      Admin

  2. Satbir Singh says:

    Thanks for sharing Knowledge on Section 269ST of Income tax

  3. rajkumar says:

    when the notification publicize to media

    1. admin says:

      Sir
      It was already published and approved in Budget 2017

  4. vishal says:

    if co-operative society received in cash Rs.150000/- per day from single person in week (6 days) and create FD receipt seperate for that particular date/ day then section 269 ST applicable to the society. Commulative figure is Rs.900000/-. Please clarified sir.

    1. Dhanesh Mistry-CMA says:

      Yes Sir
      Even if cash is received by Co-operative Society on different days but in aggregate of more than Rs. 200000/- section 269st will be applied

  5. Ruturaj says:

    Thank you sir.
    1) If i will received rent from co-operative society per month in SB account of that particular co-operative society & i withdraw in cash & yearly aggregate amount excced Rs.2 lakh then applicable to this section
    2) If i will received Building maintaince charges from co-operative society per month in SB account of that particular co-operative society & i withdraw in cash & yearly aggregate amount excced Rs.2 lakh then applicable to this section
    3) If i will received salary from co-operative society per month in SB account of that particular co-operative society & i withdraw in cash & yearly aggregate amount excced Rs.2 lakh then applicable to this section

  6. DHARMENDRA KUSHWAHA says:

    it’s good decision taken by income tax department to stop Corruptions.

  7. Kamal Kashyap says:

    sir,
    If an NBFC (Non Banking Financial Company) Lend an Amount of Rs. 360000/- For an Year and the Monthly Installment is Rs.30000/- (Without Any Interest). So May i Receive The Installment Of Rs.30000/- P.M ?

  8. Dhananjay Shah says:

    Dear Kamal

    I can’t understand your query.

  9. Kamal Kashyap says:

    sir,
    My query is may i receive monthly installment of rs 30000/- for continuously 12 months. as a repayment of loan.

    1. Ashok Mani says:

      Is all transaction are in Cash or Cheque?

  10. Ravi says:

    Point number (d) is not true, as cbdt clarify there is not restrictions on withdrawal of cash from bank as on today.

  11. Surya Kumar Pani says:

    A compny sells different products . In One of the product it sells locally and collect cash only. One buyer lets say Mr A makes purchase of the same product for a consideration in the g. Y 2017-18 by more than 2 lakhs lets say 10 lakhs. The entire sale was made in different invoices . Whether still section 269st can be invoked. Pls…

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