Section 269ST is introduced by Finance Act, 2017 with effect from 01.04.2017 and put a limit on Cash Transaction, according to which
No person shall receive an amount of 2 lakh rupees or more
(a) In aggregate from a person in a day; or
(b) In respect of a single transaction; or
(c) In respect of transactions relating to one event or occasion from a person,
Otherwise than by an account payee cheque or bank draft or electronically
Exceptions: This section shall not apply to
(i) Government, any banking company, post office savings bank or co-operative bank
(ii) Transactions of the nature referred to in Section 269SS
(iii) Such other persons or class of persons or receipts, which the CG notifies in Official Gazette
Note: Banking Company and Cooperative bank shall have the same meaning as said in Sec 269SS.
Penalty U/S 271DA:
If a person receives any sum in contravention of the provisions of section 269ST, shall be liable to pay by way of penalty, equal to the amount of such receipt.
1. Capital introduction by partner more than Rs.2,00,000/- in an aggregate is a violation under 269ST?
Ans: Yes. It violates the clause (iii). Capital introduction is an event.
2. Withdrawal of capital or profits by a partner more than Rs.2,00,000/- in an aggregate is a violation under 269ST?
Ans: Yes. It violates the clause (iii). Capital introduction is an event similarly withdrawal is also an event.
3. A raises an invoice value of Rs.2,50,000 (more than 2 lakhs) on B. Can A collect the entire amount in cash on different dates?
Ans: No. It violates the clause (ii)
4. Numerous invoices with value lesser than Rs.2,00,000/- have been raised against the same person for an event and on aggregation it exceeds Rs.2,00,000. Payments are received in cash on different dates and are lesser than Rs.2,00,000. Can the person collect the entire amount in cash on different dates?
Ans: No. It violates the clause (iii).
5. Credit Sales is made in a FY 17-18 for Rs.2,50,000/- and the amount is recovered in cash over more than one financial year, i.e FY 17-18 and FY 18-19. Can the person do so?
Ans: No. he cannot collect like this. The act does not specify any period with response to cessation of time limit for such collection of amount.
6. Can cash be collected excess of 2 Lakhs from more than one person relating to one common event?
Ans: As per Clause (iii)- “In respect of transactions relating to one event or occasion from a person”, person can also be interpreted as Persons. Hence, be as a safer side, better to avoid such cases.
7. Can exempt income and cash gifts be collected in cash exceeding the 2 lakhs?
Ans: No. It cannot be collected in such manner.
8. Will Debtor directly depositing into the Creditor’s Bank A/c, is a violation under 269ST?
Ans: No. It’s not a violation. Audit Trail can be done in this situation through PAN.
9. Can EMI ‘s be received in cash for more than 2 lakhs?
Ans: No. It violates Clause (iii).