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Income Tax Rules : In this age of digitalization, everything is happening online. Everything from shopping to payments is done in just one click. Yet, cash transactions are common. Before making a cash transaction, it’s crucial to understand the rules. Let’s find out if you can withdraw cash within a day.
Income Tax Rules: In today’s era of promoting digital payments, the tax department’s strictness on cash transactions is not surprising. Therefore, it’s important to be aware of the current law so that you don’t get into trouble due to your negligence. In any case, the Income Tax Department keeps a close eye on high-value transactions. Therefore, taxpayers should always be cautious about such transactions. Let’s find out how much cash you can transact in a day.
According to Section 269ST of the Income Tax Act, any individual can transact up to ₹2 lakh per day. If the transaction amount exceeds this limit, you may be at risk from the Income Tax Department. Abhishek Soni, CEO and co-founder of Tax2win, says that taxpayers should be aware that the Income Tax Department monitors cash transactions exceeding a certain limit. Notices from tax officials are possible.
Penalties may apply.
If someone violates Section 269ST and accepts cash of ₹2 lakh or more, they may have to pay the entire amount as a fine. For example, if you accept ₹3 lakh in cash for a property deal or business transaction, if the tax department catches you, you will have to pay a fine of the full ₹3 lakh. This rule applies to all types of money. Tax experts say that even simple or personal transactions can come under scrutiny.
How to avoid an income tax notice?
If you want to avoid an income tax notice, it’s crucial to maintain transparency in all your transactions. Whether cash or UPI, ensure you have a bill or proof for every transaction. Especially for transactions involving the purchase and sale of large items, it’s crucial to obtain a bill. This will avoid any future problems.
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