CASH TRANSACTION LIMITS
CASH TRANSACTION LIMITS under the Income Tax Act, India – Simplified! Are you aware of the cash transaction limits that can trigger tax scrutiny or even penalties? Here's what you need to know to stay compliant and informed: 1. CASH DEPOSITS Savings Account: Deposits ≥ ₹10 Lakh in a FY must be reported. Current Account: Reporting threshold is ₹50 Lakh. (Banks report this to the IT Department.) 2. CASH WITHDRAWALS – Section 194N Withdrawals > ₹1 Cr/year: 2% TDS Not filed ITR for 3 years? ₹20L – ₹1 Cr: 2% TDS > ₹1 Cr: 5% TDS (TDS = Credit at the time of filing ITR) 3. RECEIVING CASH – Section 269ST Receiving ₹2 Lakh or more in one transaction/day/occasion? Penalty = Amount received (Excludes bank withdrawals) 4. CASH LOANS – Sections 269SS & 269T Accepting/repaying cash > ₹20,000? Penalty = Equal to loan amount 5. UNEXPLAINED CASH – Section 68 Can’t explain your cash? 60% tax + 25% surcharge + 4% cess = Over 80% tax liability! 6. CASH GIFTS Up to ₹50,000: ...