Cash transaction leaves no trail of the payer that causes tax evasion & black money. It affects the Indian economy by dual aspect one is revenue deficit to government and another one is unaccounted money that cannot flow in the economy.\u00a0 Both of these problems terribly effects the development of a country. That\u2019s why government has come up with the restrictions on cash transactions through inserting various sections in the income tax act.<\/p>\n
Demonetisation is also a step toward curbing the black money. After it imposing restrictions on cash transactions again a step to make the demonization successful. We have here briefly explained all the restrictions, limits and consequences of cash transactions although all these provisions have some specific exceptions.<\/p>\n
To get a crystal-clear view of income tax provision, we have divided the income tax provisions as per nature of cash transaction which are explained below:<\/p>\n
1. Receipts from Sale of Goods\/Services 2. Receipts from Sale of Property, Loan & Deposits 3. Receipts from Donations \u2666 Religious Trust \u2666 Charitable Trust Limit of \u20b9 200,000 is also applicable under\u00a0section 269ST<\/strong><\/p>\n 4. Payment for Expenses\/Purchase\/Assets Purchase 5. Payment for Sales of Property, Loan & Deposits 6. Payment for Donationsetc. Cash transaction leaves no trail of the payer that causes tax evasion & black money. It affects the Indian economy by dual aspect one is revenue deficit to government and another one is unaccounted money that cannot flow in the economy.\u00a0 Both of these problems terribly effects the development of a country. That\u2019s why government … <\/p>\n","protected":false},"author":1,"featured_media":27,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[4,7,9,8,5,6],"_links":{"self":[{"href":"https:\/\/scbc.co\/blog\/index.php\/wp-json\/wp\/v2\/posts\/26"}],"collection":[{"href":"https:\/\/scbc.co\/blog\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/scbc.co\/blog\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/scbc.co\/blog\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/scbc.co\/blog\/index.php\/wp-json\/wp\/v2\/comments?post=26"}],"version-history":[{"count":3,"href":"https:\/\/scbc.co\/blog\/index.php\/wp-json\/wp\/v2\/posts\/26\/revisions"}],"predecessor-version":[{"id":30,"href":"https:\/\/scbc.co\/blog\/index.php\/wp-json\/wp\/v2\/posts\/26\/revisions\/30"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scbc.co\/blog\/index.php\/wp-json\/wp\/v2\/media\/27"}],"wp:attachment":[{"href":"https:\/\/scbc.co\/blog\/index.php\/wp-json\/wp\/v2\/media?parent=26"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scbc.co\/blog\/index.php\/wp-json\/wp\/v2\/categories?post=26"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scbc.co\/blog\/index.php\/wp-json\/wp\/v2\/tags?post=26"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n<\/strong>\u2666 Amount Limit: \u20b9 2,00,000 (Section 269ST)
\n\u2666 Applicable to all person\/business entities
\n\u2666 Amount Calculation \u2013 Aggregate from a single person in day OR w.r.t. single transaction OR w.r.t. single event\/occasion
\n\u2666 Consequences of non-compliance \u2013 Equal amount of Penalty<\/p>\n
\n<\/strong>\u2666 Amount Limit: \u20b9 20,000 (Section 269SS)
\n\u2666 Applicable to All persons\/business entities
\n\u2666 Amount Calculation \u2013 Aggregate amount of existing outstanding loan, deposit, sale proceeds of property along with interest and proposed amount of loan, deposit & sale proceeds.
\n\u2666 Consequences of non-compliance \u2013 Equal amount of Penalty<\/p>\n
\n<\/strong>\u2666 Political Parties
\n<\/strong>i. No donation of \u20b9 2,000 or more is received otherwise than by banking channel.
\nii. Consequences \u2013 The income to the extent will not be exempted under section 13A.<\/p>\n
\n<\/strong>i. No Limit on cash receipts of Donation (Anonymous or non-anonymous) except limit of \u20b9 2 Lacs under section 269ST
\nii. Cannot registered under section 80G hence cannot issue donation slips which are eligible for exemption under\u00a0section 80G<\/strong>.<\/p>\n
\n<\/strong>i. Anonymous Donations i.e. donation in cash without identity of donor if above the specified limit than it would be taxable as per section 115BBC
\nii. Non Anonymous Donations \u2013 Cannot issue donation slips eligible for exemption under 80G if donation is in cash above \u20b9 2,000<\/p>\n
\n<\/strong>\u2666 Section 43A(3) & 43 \u2013 Limit is of \u20b9 10,000
\n\u2666 Amount Calculation \u2013 Aggregate of payments made to a person in a day
\n\u2666 Consequences \u2013 Expenses would be no eligible for calculation of Profit for taxation purpose and so much amount asset which is paid in cash would not be eligible for deprecation under section 32.<\/p>\n
\n<\/strong>\u2666 Amount Limit: \u20b9 20,000 (Section 269T)
\n\u2666 Applicable to All persons\/business entities
\n\u2666 Amount Calculation \u2013 Aggregate amount of existing outstanding loan, deposit, sale proceeds of property along with interest and proposed amount of loan, deposit & sale proceeds.
\n\u2666 Consequences of non-compliance \u2013 Equal amount of Penalty<\/p>\n
\n<\/strong>\u2666 Donations above \u20b9 2,000 in cash is not eligible for deductions under 80G.
\n\u2666 Medical Insurance premium paid in cash not eligible for deduction u\/s 80D<\/p>\n","protected":false},"excerpt":{"rendered":"