Understanding Section 269ST: A Brief Overview

Objective: Section 269ST of the Income Tax Act targets cash transactions to combat black money and tax evasion.

Scope of Applicability: Prohibits individuals from receiving INR 2 lakh or more: In aggregate from one person in a day. For a single transaction. For transactions related to one event or occasion from one person. Exceptions: Payments via cheque, bank draft, or electronic clearing system are exempt.

Exclusions: Government entities. Banking institutions. Post office savings banks. Co-operative banks. Other notified persons or receipts. Transactions under Section 269SS (related to loans) are exempt.

Penalty: Non-compliance leads to penalties under Section 271DA. Penalty amount equals the sum received in contravention. Exception: No penalty if good and sufficient reasons for the contravention are proven. Section 269ST serves as a deterrent against large cash transactions, promoting transparency and accountability in financial dealings.