Cash transaction allowed per day between individuals
Human
(Querist) 27 December 2011
This query is : Resolved
Dear Experts,
Is there any law / act / rule regarding the MAXIMUM PERMISSIBLE LIMIT of Cash Transaction between any 2 Indian Citizens in a day?
If there is one, please help with the relevant Act / Rule / Clause.
Also, if someone does a cash transaction Higher than the permissible limits in a day, what are the penalties related to the same?
Shailesh Kr. Shah
(Expert) 27 December 2011
section 269ss and 269t describes limit for certain transactions.
If your specify, nature of transaction, i shall guide you accordingly.
Deepak Nair
(Expert) 27 December 2011
Dear Shailesh, sections of which Act? Please specify?
prabhakar singh
(Expert) 27 December 2011
MR.Shailesh meant section 269ss and 269t of Income Tax Act, 1961,I HOPE.
Nadeem Qureshi
(Expert) 27 December 2011
Dear Human
ask your query in specific manner with full detail for point to point answer.
Mr. Shailesh is right.
Deepak Nair
(Expert) 27 December 2011
I too agree with Mr. Shailesh. Proper answer cannot be given unless and detiails are given.
Human
(Querist) 27 December 2011
Dear Learned Experts,
The specific query is that am I allowed to handover Cash of say INR 1,00,000 to a friend of mine (as a gift) on a single day if I need to?
Does the IT Acts stop me from doing so and RATHER allow to do this transaction only through a Cheque/DD or Online Transfer ONLY?
If yes, what is that Limit, what is the Law around it and also what are the penalties if the transaction is dont in Cash and NOT under Cheque / DD / NEFT / EFT / RTGS.
Shailesh Kr. Shah
(Expert) 27 December 2011
Dear Mr.Human,
You can give cash as gift from your own capital.There is no provisions in the income tax act, which probhits such transaction.
But your friend have to pay income tax on such gift.
It is advisable to you in your interest that make payment through cheque/dd/neft/rtgs.
prabhakar singh
(Expert) 27 December 2011
yes Mr.Shah is right cash gifts under section 56(2)(v)of I.T.Act are taxable in the hands of donee[person receiving the gift]if it is more than 25k,under the head INCOME FROM THE OTHER SOURCES;However, it is interesting to note that while one can be taxed for accepting cash, one will not be taxed if one gets a gift in kind, irrespective of the gift's value.
However,if gift is received from certain relations such as following it shall not be taxable in hands of donee:
a) From a relative, or
b) On the occasion of the marriage of an individual, or
c) Under a will or by way of inheritance, or
d) In contemplation of the death of the payer. The amount so received shall not be taxed under the Income tax.
The expression 'relative' for this purpose has been defined as:
Spouse of the individual
Brother or sister of the individual
Brother or sister of the spouse of the individual
Brother or sister of either of the parents of the individual
Any lineal ascendant or descendant of the individual
Any lineal ascendant or descendant of the spouse of the individual and
Spouse of a person referred to in items (ii) to (vi) mentioned above.
Shailesh Kr. Shah
(Expert) 28 December 2011
@Prabhakar Sir,
I would like to correction in your previous reply of this thread that read rs.50,000 instead of 25K.
Human
(Querist) 28 December 2011
Dear Experts,
So if a handover say INR 1,00,000 cash to say my mother-in-law on a single day, it is not permissible ON A SINGLE DAY.
I, as per the law, should only make that transfer through Cheque/DD/RTGS etc. BUT NOT CASH. Is that right?
What clauses of IT Act stop any cash transaction above INR 25K illegal on A SINGLE DAY?
Shailesh Kr. Shah
(Expert) 28 December 2011
Giving cash INR 1 Lacs to MIL as Gift is allow, however, loan to MIL is not permissible.
Human
(Querist) 28 December 2011
Shailesh Kr. Shah ji. But if I give cash INR 1L to my MIL as a dowry (e.g.), MIL will have to pay tax on it.
Does that mean that tomorrow I can claim that I have given INR 1 Lakh CASH on a single day to my MIL as Dowry on a particular day and the law allows such "SINGLE DAY" "CASH TRANSACTION"?
Shailesh Kr. Shah
(Expert) 28 December 2011
please clarify what do you want??
first you said friend, thereafter mil, thereafter gift, thereafter dowary.
come with actual problem, i shall reply.
Human
(Querist) 29 December 2011
Shailesh ji, my actual issue is:
My MIL claims to have handed over cash of about INR 1.25 Lakhs to me (as dowry) to me on a single day.
I am just trying to see if there is a Income Tax clause or Act which could help me make her cat bite her only!!
soumitra basu
(Expert) 30 December 2011
The queriest must come in clean hand before the experts. Otherwise it will not be possible to answer.
