If you accepts Cash in excess of Rs 2 lacs, you are liable to pay a
penalty of Rs 2 lacs under Income-tax Act
Jewellers , Builders and
Hospitals have to be more cautious while accepting
cash.
From 1st April cash transactions must be done very cautiously. Gifts
etc. amounting to more than Rs 2 Lakhs received in cash may attract penalty.
This will affect Jewellers, Hospitals, builders, persons who carry business in
cash. Further cash purchases or expenses above Rs 10,000 may be levied a
penalty, earlier the limit was Rs. 20000. Transactions must be done through
banks only .
Cash sale in excess of Rs
2 lacs is to be avoided.
From 1st April 2017, for accepting cash more than Rs 2 lacs is an
offence under IT Act.
On cash transactions if cash accepted of Rs. 2 Lakh or more then there
is 100% penalty on it to
acceptor.
v To a single person or on one day or through one
transaction if Rs. 2 Lakh or more is accepted in cash then there is penalty.
v It means following four rules must be considered: (1)
Rs. 2 Lakh or more (2) one person (3) One day (4) one transaction must be
followed.
No split Sale is Allowed
One seller is not permitted to receive more than Rs. 2 Lakh in cash which
connotes that one seller cannot accept in excess of Rs 2 lakhs in cash from any
one buyer. For instance: If X Sell products for Rs 1 lakh and supplies bill no.
x to Y customer and on the same day gives another bill no. m amounting to Rs.
1.5 lakhs, total amount equal to Rs. 2.5 Lakh and for such transactions seller
may be levied with a penalty of 100% as he has received more than Rs 2 lacs in
cash in a day.
The Meaning of One Transaction
One transaction means if the amount on the bill goes in excess of Rs 2
Lakhs and even if such amount is received through cheque or online transfer and partly in cash then
also such transactions may be liable to attract penalty. For Ex.: X seller
makes a credit sale of Rs. 2.5 Lakhs to Customer B on 20th April and on 22nd
April the customer A pays Rs. 2.25 Lakh through Cheque and Rs. 25,000 in cash
still in such transaction seller X may
be liable for penalty because the transaction has gone beyond Rs. 2 Lakhs.
Courtesy - CA Umesh Sharma
