Section 269ST of Income Tax Act
The federal government amended the Income Tax Act of 1961 to include Section 269ST of Income Tax Act in an effort to combat tax evasion, money laundering, and control of the black market. Since cash transactions are challenging for the government to track, the majority of transactions in India are carried out in cash (especially real estate transactions). Invoking such laws in order to limit cash transactions is therefore highly necessary and necessary. The measure already has rules that limit cash transactions.
overall from someone else/someone in a day. A person may, however, receive less than INR 2 Lakhs in cash from a person in a single day.
Practical examaple of 269ST Income Tax Act
If Mr. X sells Mr. Y products for a single payment of Rs. 3 lakh, Mr. X can provide Mr. Y cash in exchange for the remaining Rs. 2 lakh. In this situation, the remaining payment must be received using legal banking channels. The payee cannot get any money if the bill amount is Rs. 2 lakhs or higher, which is the statutory upper limit.
One receiver; and payer, multiple transactions, single event
Every sort of transaction relating to a particular event or occasion is restricted under clause (c) of Section 269ST of Income Tax Act. The section states that an organisation is only permitted to collect less than Rs. 2 lakhs for all transactions connected to a particular event or occasion. The payment may be paid in relation to a number of transactions that are dispersed throughout various days or events, but are all connected to the same event or occasion. Therefore, the following conditions must be met for this provision to apply:
- A single-payer
- A single receiver
- There must be a specific date or event that the payments are tied to.
- The transactions may take several or more days to complete.
Section 269ST of Income Tax Act pdf and notification
Article 271DA penalty for breaking section 269ST 1961 rules
As was said above, the failure to comply with the requirements of section 269ST 1961 is the sole situation where the penalty under section 271DA is applicable. Therefore, it is crucial to comprehend the provisions of section 269ST, which are described below:
- No individual shall receive, as stated in Section 269ST –
- An sum of INR 2 Lakh or more from a person in a single transaction, INR 2 Lakh or more
- from a person in a day’s worth of transactions, or INR 2 Lakh or more in a transaction pertaining to a single event or occasion.
It should be mentioned that the recipient may receive up to INR 2 Lakhs via any of the following methods:
- a check made payable to yourself;
- a bank draught for an account payee; or
- through a bank account’s usage of an electronic clearing system; or
- using another authorised electronic method.
In order to address the long-standing issue of black money terrorising the Indian economy, Section 269ST was enacted. People from many walks of life have been impacted by the requirements of section 269ST 1961, thus it is important to exercise caution while conducting transactions in order to avoid being penalised. Taxpayers should make every effort to abide by the rules outlined in this section while bearing in mind the government’s attempt to make the economy cashless.
Hope you have got this post knowledge of Section 269ST of Income Tax Act. We will continue to write you such posts in the future.