Chapter 18: Miscellaneous Provisions & Cash Restrictions
1. Cash Transaction Restrictions Matrix
| Section | Prohibited Transaction | Monetary Threshold | Permissible Modes |
|---|---|---|---|
| Sec 269SS | Acceptance of any Loan, Deposit, or Specified Advance | Aggregate ≥ ₹ 20,000 (including unpaid balance) | A/c Payee Cheque, A/c Payee Draft, ECS, or electronic banking. (₹ 2 Lakhs for Primary Agri Credit Society). |
| Sec 269T | Repayment of any Loan, Deposit, or Specified Advance | Aggregate ≥ ₹ 20,000 (including interest) | A/c Payee Cheque, A/c Payee Draft, ECS, or electronic banking. |
| Sec 269ST | Receipt of an amount in cash | ≥ ₹ 2,00,000:
(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/occasion. |
A/c Payee Cheque, Draft, or ECS only. |
2. Mandatory Quoting of PAN (Rule 114B Transactions)
| Nature of Transaction | Monetary Value Threshold |
|---|---|
| Sale or purchase of a Motor Vehicle (other than two-wheelers) | All transactions (regardless of amount). |
| Opening an account with a Banking Company | All accounts (other than Basic Savings Bank Deposit Account). |
| Applying for a Credit or Debit Card | All applications. |
| Payment in cash for purchase of Bank Drafts / Pay Orders / Banker's Cheques | Amount aggregating > ₹ 50,000 in a day. |
| Deposit in cash with a bank / post office | Amount aggregating > ₹ 50,000 in a day. |
| Payment in cash to Hotel or Restaurant | Amount exceeding ₹ 50,000 at any one time. |
| Sale or purchase of Immovable Property | Amount exceeding ₹ 10 Lakhs or valued at SDV > ₹ 10 Lakhs. |
| Sale or purchase of Goods or Services (other than above) | Amount exceeding ₹ 2 Lakhs per transaction. |
3. Strict 100% Penalties for Cash Violations
| Violation Section | Penalty Section | Penalty Quantum | Adjudicating Authority |
|---|---|---|---|
| Violation of Section 269SS | Section 271D | 100% of the loan / deposit accepted. | Joint Commissioner of Income Tax. |
| Violation of Section 269T | Section 271E | 100% of the loan / deposit repaid. | Joint Commissioner of Income Tax. |
| Violation of Section 269ST | Section 271DA | 100% of the cash received. | Joint Commissioner of Income Tax. |
Reasonable Cause Exception (Sec 273B): No penalty is imposable u/s 271D, 271E, or 271DA if the assessee proves that there was a reasonable cause for the failure (e.g. emergency medical payment on bank holiday).
4. Higher TDS / TCS for Non-Filers (Sec 206AB & 206CCA)
Where tax is required to be deducted/collected on payments to a "Specified Person" (who has not filed return for preceding previous year and aggregate TDS/TCS $\ge ₹ 50,000$):
$ ext{TDS / TCS Rate} = ext{HIGHER of:}$
(a) Twice the rate specified in the relevant provision, OR
(b) Twice the rate or rates in force, OR
(c) 5%.
$ ext{TDS / TCS Rate} = ext{HIGHER of:}$
(a) Twice the rate specified in the relevant provision, OR
(b) Twice the rate or rates in force, OR
(c) 5%.
5. High-Frequency Exam Traps
Trap 1: Bearer cheque is treated as CASH!
Accepting or repaying a loan via Bearer Cheque or Crossed Cheque (not Account Payee) is an absolute violation of Section 269SS / 269T and attracts a 100% penalty!
Accepting or repaying a loan via Bearer Cheque or Crossed Cheque (not Account Payee) is an absolute violation of Section 269SS / 269T and attracts a 100% penalty!
Trap 2: Splitting single cash receipt across multiple days!
Section 269ST prohibits cash receipt of ₹ 2 Lakhs or more in respect of transactions relating to ONE EVENT OR OCCASION. Receiving ₹ 50,000 daily for 5 days for a wedding event is an outright violation!
Section 269ST prohibits cash receipt of ₹ 2 Lakhs or more in respect of transactions relating to ONE EVENT OR OCCASION. Receiving ₹ 50,000 daily for 5 days for a wedding event is an outright violation!