Income Tax Act, Know more about the income tax penalty
Did you know? If you had done a transaction of Rs 2 lakh or carried that amount or more one single day, then you are liable to pay penalties. The penalty will be applicable for the 100% of the entire cash amount received.
Under Section 269ST, the Income Tax Act restricts any person from receiving cash of Rs 2 lakh or more, from a person, in respect of transactions relating to an event.
It has been done to halt tax evasion in the country. In case someone decides to settle the debt of a sum amounting Rs 2 lakh, as per guidelines, that person is liable to pay penalties. The penalty includes 100% of the entire cash amount.
While it must be noted that a person is allowed to transact an amount equal to Rs 2 lakh through an account payee bank draft/account payee cheque/use of Electronic Clearing System (ECS) through a bank account.
ECS through a bank account includes transactions through credit card, debit card, IMPS (Immediate Payment Service), UPI (Unified Payment Interface), BHIM (Bharat Interface for Money), RTGS (Real Time Gross Settlement), NEFT (National Electronic Funds Transfer), Adhar Pay and net banking mode.
Thus, a payment of Rs 2 lakh is possible via any of the above-mentioned methods only and a cash amount of Rs 2 lakhs received by any person is liable to pay a penalty of a sum equal to the amount under Section 271DA; the penalty will be imposed by Joint Commissioner.
Whereas, the Income Tax Act or Section 269ST is not applicable to any receipt of amount by the government, post office savings bank, any banking company, or co-operative bank.