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—cash-transaction-limit-269ss-269t-penalty-india [2026/07/10 21:21] (current) – created - external edit 127.0.0.1
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 +{{htmlmetatags>metatag-description=(Accepting or repaying a loan, deposit or property advance of Rs 20,000 or more in cash triggers a 100 percent penalty under Sections 269SS, 269T and 271D, 271E.)&metatag-keywords=(section 269SS, section 269T, section 269ST, cash transaction limit, 100 percent penalty, 271D 271E)&metatag-robots=(index,follow)&metatag-og:title=(Cash limits under 269SS, 269T and 269ST and the 100% penalty)&metatag-og:description=(Accepting or repaying a loan, deposit or property advance of Rs 20,000 or more in cash triggers a 100 percent penalty under Sections 269SS, 269T and 271D, 271E.)&metatag-og:type=(article)}}
 +====== Cash transaction limits under 269SS, 269T and 269ST ======
  
 +If you accept OR repay a loan, deposit or property advance of **Rs 20,000 or more in cash**, the Income-tax Act lets the department levy a penalty of **100 percent** of that amount. Take Rs 5 lakh as a hand loan in cash and the penalty can be the full Rs 5 lakh, on top of any tax. Separately, no person may **receive Rs 2 lakh or more in cash** from one person in a day or for a single event. These are flat, regime-neutral penalties, not deductions, so they bite under both the old and the new tax regime.
 +
 +===== The limits and penalties at a glance =====
 +
 +^ Transaction ^ Cash limit ^ Section ^ Penalty (and section) ^
 +| Accepting a loan or deposit in cash | Rs 20,000 or more | 269SS | 100% of the amount, under 271D |
 +| Repaying a loan or deposit in cash | Rs 20,000 or more | 269T | 100% of the amount, under 271E |
 +| Accepting a property advance in cash (specified sum) | Rs 20,000 or more | 269SS | 100% of the amount, under 271D |
 +| Repaying a property advance in cash (specified advance) | Rs 20,000 or more | 269T | 100% of the amount, under 271E |
 +| Receiving cash from one person in a day or for one event | Rs 2,00,000 or more | 269ST | 100% of the amount, under 271DA |
 +
 +<WRAP info>
 +Quick answer: the magic number for loans, deposits and property advances is **Rs 20,000** (Sections 269SS and 269T). The magic number for any large cash receipt is **Rs 2 lakh** (Section 269ST). Cross either line and the penalty equals 100 percent of the cash amount.
 +</WRAP>
 +
 +===== What actually counts =====
 +
 +These are three distinct triggers. Knowing which one applies decides which penalty section the Assessing Officer reaches for.
 +
 +  - **Section 269SS - taking money in.** You cannot **accept** a loan, deposit or "specified sum" of Rs 20,000 or more otherwise than by account-payee cheque, account-payee bank draft or electronic transfer (NEFT, RTGS, UPI, IMPS). The loan limb and the deposit limb are general; they cover any loan or any deposit of money, not just property deals. The third limb, "specified sum", was added in 2015 and means any sum receivable, whether as advance or otherwise, in relation to the transfer of immovable property, whether or not the transfer eventually happens. So a cash booking advance on a flat is squarely covered.
 +
 +  - **Section 269T - paying money out.** You cannot **repay** a loan, deposit or "specified advance" of Rs 20,000 or more in cash. "Specified advance" is the mirror image: a sum received as advance for transfer of immovable property that is being returned, for instance when a property deal falls through and the seller hands the buyer's advance back in cash.
 +
 +  - **Section 269ST - any big cash receipt.** Quite apart from loans, no person may **receive** Rs 2 lakh or more in cash (a) in aggregate from one person in a day, (b) for a single transaction, or (c) for transactions relating to one event or occasion. This catches a cash sale, a cash gift, a cash settlement or splitting a Rs 6 lakh wedding-catering bill into three cash payments on different days. For the full Rs 2 lakh rule, see our guide to [[https://righttoinformation.wiki/section-269st-cash-transaction-limit-2-lakh-penalty-india|the Section 269ST cash limit]].
 +
 +The Rs 20,000 test under 269SS and 269T is not only per transaction. It also looks at the running balance: if earlier cash loans from the same person already stand at Rs 20,000 or more, even a fresh small amount in cash falls foul of the section.
 +
 +Need to ask a bank, registrar or tax office for records of a cash transaction or a penalty order? The [[https://righttoinformation.wiki/tools/ai-rti-draft-app.html|AI RTI Drafter]] can frame the request, and the [[https://righttoinformation.wiki/tools/timeline-calculator-app.html|Timeline Tracker]] keeps your reply deadlines straight under the [[:act|RTI Act, 2005]].
 +
 +===== Who is exempt =====
 +
 +The exceptions are narrow and you should not assume one applies. For **Sections 269SS and 269T**, the carve-outs include:
 +
 +  * the **Government**;
 +  * any **banking company, post office savings bank or co-operative bank**;
 +  * any **corporation established by a Central, State or Provincial Act**;
 +  * any **Government company** as defined in the Companies Act; and
 +  * loans or deposits where **both** parties have only **agricultural income** and **neither** has any income chargeable to tax under the Act.
 +
 +For **Section 269ST**, the exceptions are different and you must not borrow the agriculturist carve-out from 269SS. The 269ST exclusions are: the **Government**; any **banking company, post office savings bank or co-operative bank**; receipts already covered by **Section 269SS** (so the same cash loan is not penalised twice); and other persons or transactions notified by the Central Government. Cash withdrawals from your own bank account are not a "receipt" caught by 269ST.
 +
 +===== A worked example =====
 +
 +<WRAP center round box>
 +**Ramesh borrows for a shop, in cash.** Ramesh needs Rs 5,00,000 to expand his kirana shop and borrows it in cash from a friend, repaying Rs 2,00,000 in cash a few months later.
 +
 +  * Accepting Rs 5,00,000 in cash breaches **Section 269SS**. Penalty under **Section 271D** = Rs 5,00,000 (100 percent).
 +  * Repaying Rs 2,00,000 in cash breaches **Section 269T**. Penalty under **Section 271E** = Rs 2,00,000 (100 percent).
 +
 +Total exposure: **Rs 7,00,000 in penalties** on a Rs 5,00,000 loan, separate from any tax. Had the friend instead paid Ramesh Rs 2,00,000 in cash against a single sale invoice, **Section 269ST** would trigger a 100 percent penalty under **271DA** on the receiver. The fix in every case is the same: route it through bank channels and keep proof.
 +</WRAP>
 +
 +If you ever face such a penalty order, Section 273B gives a defence: no penalty is leviable if you can show **reasonable cause** for the cash dealing (for example, a genuine emergency, or a lender who insisted on cash). It is a defence you must prove, not an automatic escape.
 +
 +===== Frequently asked questions =====
 +
 +==== Is the Rs 20,000 limit per transaction or for the whole year? ====
 +It applies per lender or depositor and looks at the amount taken or repaid in a single dealing, but it also aggregates the outstanding balance from the same person. Several Rs 19,000 cash loans from one person that together cross Rs 20,000 can still attract the penalty.
 +
 +==== Does Section 269SS apply to cash advances for buying a flat? ====
 +Yes. Since 2015, a "specified sum" - any advance received in relation to the transfer of immovable property - is covered, whether or not the sale finally goes through. A cash booking advance of Rs 20,000 or more breaches 269SS.
 +
 +==== Who imposes the penalty and how much is it? ====
 +The penalty is imposed by the Joint Commissioner of Income-tax and equals 100 percent of the cash amount: under Section 271D for breaching 269SS, Section 271E for breaching 269T, and Section 271DA for breaching 269ST.
 +
 +==== Can I withdraw Rs 2 lakh or more cash from my own bank? ====
 +Yes. Section 269ST restricts cash you **receive** from another person; drawing your own money out of your account is not a receipt caught by the section. Banks may, however, deduct TDS under Section 194N on very large yearly cash withdrawals, which is a separate rule.
 +
 +==== What if the lender forced me to take or repay in cash? ====
 +Section 273B lets you escape the penalty if you prove a genuine "reasonable cause", such as a real emergency or a lender who refused any other mode. Courts have cancelled penalties on this ground, but the burden of proof is on you, so keep documents.
 +
 +==== Are loans between two farmers exempt? ====
 +Only narrowly. The 269SS and 269T exemption applies where **both** parties earn **only agricultural income** and **neither** has any taxable income under the Act. If either party has taxable income, the exemption is gone. This farmer carve-out does **not** extend to Section 269ST.
 +
 +===== Sources =====
 +
 +  * Income-tax Act, 1961 - Section 269SS (mode of accepting loans, deposits and specified sums): https://www.incometaxindia.gov.in/w/section-269ss-37
 +  * Income-tax Act, 1961 - Section 271D (penalty for breach of 269SS): https://www.incometaxindia.gov.in/w/section-271d-31
 +  * Income-tax Act, 1961 - full bare Act (Sections 269T, 271E, 269ST, 271DA): https://www.indiacode.nic.in/bitstream/123456789/2435/1/a1961-43.pdf
 +  * India Code - Section 269SS entry: https://www.indiacode.nic.in/show-data?actid=AC_CEN_2_2_00039_196143_1524045010860&sectionId=45159&sectionno=269SS&orderno=731
 +  * The RTI Playbook (how to obtain records and challenge official action): [[https://righttoinformation.wiki/book|The RTI Playbook]]
 +
 +If a department refuses to share a penalty file or the basis of an order, push back through the [[https://righttoinformation.wiki/tools/first-appeal-app.html|First Appeal Builder]] and test the reply with the [[https://righttoinformation.wiki/tools/pio-reply-checker-app.html|PIO Reply Checker]].
 +===== Cash transaction limit under Section 269SS and 269T: Penalty rules and exemptions? =====
 +
 +Sections 269SS and 269T prohibit cash transactions above specified limits. Here is the complete guide:
 +
 +  - **Step 1: Section 269SS — accepting cash loans.** (a) you cannot accept a loan or deposit of Rs 20,000 or more in cash from a person, (b) the limit is Rs 20,000 per person per transaction (not per day), (c) if you accept cash above this limit: penalty under Section 271D — 100% of the loan amount, (d) the rule applies to: (i) loans, (ii) deposits, (iii) specified advances.
 +  - **Step 2: Section 269T — repaying cash loans.** (a) you cannot repay a loan or deposit of Rs 20,000 or more in cash, (b) the limit is the same as 269SS — Rs 20,000 per person, (c) penalty under Section 271E — 100% of the repayment amount, (d) the rule applies to repayment of loans, deposits, and specified advances.
 +  - **Step 3: Section 269ST — receiving cash.** (a) you cannot receive Rs 2 lakh or more in cash from a person in a single day or for a single transaction/event, (b) the limit is Rs 2 lakh per person per transaction or per event, (c) penalty under Section 271DA — 100% of the amount received, (d) this applies to ALL receipts (not just loans) — sale of goods, services, gifts, etc.
 +  - **Step 4: Common scenarios.** (a) accepting a cash loan of Rs 50,000 from a friend — violates 269SS, penalty Rs 50,000, (b) repaying a cash loan of Rs 30,000 — violates 269T, penalty Rs 30,000, (c) receiving Rs 3 lakh cash for selling a car — violates 269ST, penalty Rs 3 lakh, (d) receiving Rs 1.5 lakh cash for selling jewelry — does NOT violate 269ST (under Rs 2 lakh).
 +  - **Step 5: Exemptions.** (a) government, banking companies, and post office are exempt, (b) transactions through account payee cheque/draft/electronic transfer are exempt, (c) transactions by the Central Government (notified), (d) transactions in the course of business (specified by the government), (e) HUF transactions (specified), (f) agricultural transactions (specified).
 +  - **Step 6: How to avoid penalty.** (a) always use account payee cheque, DD, or bank transfer for loans above Rs 20,000, (b) never receive cash above Rs 2 lakh for any transaction, (c) maintain proper records of all loans and repayments, (d) if you have already violated: disclose in the ITR and pay the penalty before assessment.
 +  - **Step 7: File RTI.** File RTI with the CBDT asking for: (a) the total penalties imposed under 269SS/269T/269ST, (b) the number of cases, (c) the average penalty amount.
 +
 +See [[https://righttoinformation.wiki/interest-section-234abc-late-tax-filing-india|Section 234ABC]] and [[https://righttoinformation.wiki/gst-reverse-charge-mechanism-rcm-india|GST RCM]].
 +
 +{{tag>cash transaction limit 269ss 269t 269st penalty 20000 2 lakh 271d 271e 271da 2026}}