Income Tax : In this growing era of digital age, most of the things have become online. All the work related to banking sector has started happening online.
Even to make payment, there is no need to go to the bank and stand in queues. Money can be easily sent and received from home or anywhere through phone.
But despite this, even today people prefer to transact in cash and consider it safer than digital payment. If you also do cash transactions several times a day, then you should know about the rules related to income tax. Actually, if you do cash transactions more than the limit in a day, then the Income Tax Department can take action by sending a notice to your house. Therefore, it is very important to know the limit of cash transactions.
Cash Transaction
In this era of digital payments, the monitoring of the Income Tax Department has also increased a lot. Often people think that whether it is a digital payment or a cash transaction, if you do not tell the department, they will not know.
Actually, people who do cash transactions think like this more. Yes, the Income Tax Department keeps a close watch on big cash transactions. In such a situation, if you make any mistake while taking cash, you will get an Income Tax notice.
Rules for cash transactions-
Action on 5 lakh cash transaction-
If a person takes up to Rs 5 lakh in cash in a day and in such a situation the Income Tax Department issues a notice, then if that person is unable to give correct information about the source of that income in response to the notice, then action can be taken against him.
Apart from this, strict action can be taken against the person and he may also have to pay a heavy fine. However, this limit of Rs 5 lakh cash does not apply to cash withdrawn from banks and post offices.
How many cash transactions can be done in a day?
According to section 269ST, no person can do a cash transaction of more than Rs 2 lakh in a day. Even a single transaction should not exceed 2 lakhs. According to the rules, you cannot take more than Rs 2 lakh cash from a person in a day. You may face action if you violate these rules of the Income Tax Department.
How to do the transaction –
If you are going to receive a large amount of cash payment or are going to give it to someone for some work, then in such a situation always try to do the transaction through banking options like NEFT, RTGS, UPI.
By transacting through these options, you can avoid notices from the Income Tax Department, and financial transparency will also be maintained. In such a situation, everyone should avoid taking more than Rs 2 lakh in cash as far as possible.
