06/10/2025
🧾 Cash Transaction Limits under Income Tax Act
Not all cash transactions are allowed — cross certain limits and you may face penalty up to 100% of the amount!
Here’s a quick guide 🧵
1. 💰Cash Receipt Limit – ₹2,00,000 (Sec 269ST)
You cannot receive ₹2 lakh or more in cash:
🚫 From one person in a day
🚫 For a single transaction
🚫 For transactions relating to one event/occasion
✅ Must be through cheque, draft, or digital mode.
2. ⚠️ Penalty (Sec 271DA):
If you receive ₹2 lakh or more in cash in violation of Sec 269ST →
💥 Penalty = 100% of the cash received
3. 🏦 Cash Loan/Deposit Limit – ₹20,000 (Sec 269SS & 269T)
You can’t:
🚫 Take or accept a loan/deposit in cash > ₹20,000
🚫 Repay loan/deposit in cash > ₹20,000
✅ Must be via account payee cheque, draft, or electronic mode.
4. ⚖️ Penalty (Sec 271D & 271E):
Violation = Penalty equal to the loan/deposit amount
e.g. Accept ₹50,000 in cash → Penalty ₹50,000
5. 🏘️Property Transactions – ₹20,000 Limit
No person can accept ₹20,000 or more in cash for:
➡️Sale of immovable property
➡️Advance or consideration
Always use banking channels.
6.🎁Donations & Expenses in Cash:
🚫 80G donations above ₹2,000 not eligible for deduction.
🚫 Business expense in cash > ₹10,000 per day (per person) not allowed as deduction (Sec 40A(3)).
7.🚨 Takeaway:
Avoid large cash dealings.
Use banking channels — safe, traceable & tax-compliant.
Cash may look easy, but penalties are costly! 💸
