Udaipur, January 11, 2025 - The Income Tax Department wants people to avoid using cash for big transactions. They warn that certain deductions, allowances, or expenses won't be allowed if you pay in cash. Plus, if you are caught making large cash payments, you might have to pay a penalty equal to the cash amount.
Key Rules You Must Know
1. No Large Cash Loans or Deposits
You cannot accept a loan, deposit, or advance in cash if it’s Rs 20,000/- or more.
This includes money related to selling property, even if the sale doesn’t happen.
Penalty: If caught, you will pay a fine equal to the cash amount you accepted.
You Can Accept Cash If It’s From:
The Government
Banks or post office savings banks.
Government companies or notified organizations.
Farmers (if both parties have no taxable income).
2. Limit on Cash Payments
You cannot receive Rs 2,00,000/- or more in cash: In one day.
For one transaction.
For multiple transactions related to one event.
Examples:
Hospitals and schools cannot take fees above Rs 2,00,000/- in cash.
Religious places cannot accept cash donations over Rs 2,00,000/-.
3. No Large Cash Repayments
You cannot repay loans, deposits, or advances in cash if the total is Rs 20,000/- or more (including interest).
Exceptions: Repayments are allowed in cash if made to:
The Government
Banks or post office savings banks
Government companies
4. Mandatory Digital Payments
If a business earns over Rs 50 crore in a year, it must accept payments via:
Credit/Debit cards
Net Banking, UPI, IMPS, NEFT, RTGS, BHIM
What Happens if You Break These Rules?
You might have to pay a fine equal to the cash amount involved.
Example: If you accept a cash loan of Rs 25,000/-, you will pay a Rs 25,000/- penalty.
The rules are strict, and breaking them can lead to heavy penalties. Using digital payments is safer and helps you avoid these issues.
Source: Click Here
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