Carrying Rs 2 lakhs in cash or more? Be ready to pay 100 percent penalty

New Delhi: Under the Income Tax Act of Section 269ST, any person can be restricted from receiving an amount of Rs 2 lakh or more in cash, from a person in a day, in respect of a single transaction or in respect of transactions relating to one event or occasion from a person.

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Note that a transaction of an amount equal to Rs 2 lakh or more is allowed through an account payee cheque or an account payee bank draft or use of electronic clearing system (ECS) through a bank account. ECS through a bank account includes payment through credit card, debit card, net banking, IMPS (Immediate Payment Service), UPI (Unified Payment Interface), RTGS (Real Time Gross Settlement), NEFT (National Electronic Funds Transfer), and BHIM (Bharat Interface for Money) Aadhar Pay. 

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But if someone plans to settle a debt in lump sum, say the amount is more than Rs 2 lakhs, as per guidelines, the person will be liable to pay penalties which is 100% of the entire amount of cash received as per the Income Tax Act.

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Section 269ST of the Income Tax Act does not apply to any receipt of amount by the government, any banking company, post office savings bank or co-operative bank.

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