In India, cash remains popular for everyday purchases, but high-value transactions face strict rules. The Income Tax Act, 1961, limits cash dealings to prevent unaccounted money and promote financial transparency. Many people are unaware that breaking these limits can trigger penalties equal to the cash amount.
Section 269SS prohibits accepting loans or deposits of Rs 20,000 or more in cash. Payments must go through cheques, demand drafts, or digital methods like NEFT, RTGS, or UPI. Section 269ST bars receiving Rs 2 lakh or more in cash, whether in a single transaction or related payments. Violating these rules leads to penalties under Sections 271DD, 271DA, 271D, and 271E.
Experts, including CA Dr. Suresh Surana, stress that these rules apply even for personal transactions with friends or relatives. Businesses with turnover above Rs 50 crore face stricter compliance, including penalties for not offering digital payment options.
Judicial rulings reinforce these laws, requiring courts and registrars to report large cash payments. The government aims to curb black money, ensure traceability, and encourage digital payments.
In short, while cash is convenient for small purchases, high-value dealings must use banking or digital channels. Following these rules protects individuals and businesses from heavy fines.
