AS PER SECTION 269ST
person shall receive an amount of two lakh rupees or more—
(a) in aggregate from a person in a day; or
in respect of a single transaction; or
in respect of transactions relating to one event or occasion from a person,
than by an account payee cheque or an account payee bank draft or use of
electronic clearing system through a bank account:
IF PARTY HAS ISSUED 10 BILL OF
RS.40000 EACH ON DIFFERENT DATE OF MONTH TO A SINGLE PARTY AND HAS
RECEIVED CASH AGAINST ALL SUCH BILL ON DIFFERENT DATES WITH AMOUNT LESS THAN
50000/- EACH TIME WHETHER THIS SECTION HIT OR NOT
According to Section 269ST of the income tax act, no person
shall receive an amount of rupees two lakh or more in cash mode. The intent of
the section is clearly to put restriction on the cash transaction.
In respect of single transaction: It simply states that no single
transaction should exceed Rs. 2 lacs or more. Thus if a person splits a invoice
relating to a single transaction into different invoices of smaller values,
then also the person receiving such amount cannot receive in cash.
For example: Suppose a caterer takes order for Convocation
Function and received Rs. 10,00,000 in cash from his customer and gives
item-wise bill for various services and each bill doesn’t exceed Rs. 2,00,000
and Rs. 10,00,000 cash is received on different dates and cash received on any
one day is less than Rs. 2,00,000. This splitting of bills and splitting of
payments day-wise will not help as all these payments are “in respect of
transactions relating to one event or occasion from a person”.
In respect of transactions relating to one event or occasion
from a person: It simply states
that if a person receives cash in different transactions but all the
transaction relate to one event or occasion, then also the recipient cannot
receive cash. That is to say if all the transaction relating to one event adds
up to Rs. 2 lakh or more, then the person receiving the same cannot receive.
For example: If
Cash gift received on account of marriage exceeds Rs.2,00,000/- from “a person”
than section gets attracted as marriage is single event here. It should be
noted that gift received on account of marriage is exempt from tax u/s
56(2)(vii) does not alter the applicability of penalty u/s 271DA.
Therefore this section will hit even if amount receive in a
single day is less than 2 lakh rupees in following case:
1) All amount received
on different days connected with a single transaction
2) All amounts
received in different transaction but related to one event or occasion.