Cash transaction limits
Three statutory cash limits catch most breaches: cash receipts (s.269ST), cash loans/repayments (s.269SS / s.269T), and business cash expenses (s.40A(3)). Splitting the amount does not help — substance over form.
Within limit — s.269ST / s.271DA
Cash receipt of ₹0 is below the ₹2,00,000 s.269ST threshold.
Consequence: No s.269ST breach on this receipt taken alone — but remember the limit is also tested per single event, not just per day.
Splitting does not help. Each section uses an aggregation rule (per person / per day / per event) precisely to defeat structuring. Tribunal and court decisions consistently apply substance over form.
How we calculate this
Source: Income Tax Department — 2026-27 bracket schedule.
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| Band | Rate |
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- s.269ST — no one may receive ₹2 L or more in cash from one person in a day, or for one transaction, or for one event/occasion. Penalty under s.271DA is 100% of the cash received.
- s.269SS / s.269T — cash loans or deposits accepted or repaid of ₹20,000 or more attract penalty under s.271D / s.271E equal to the amount. Use a/c-payee cheque, draft or electronic transfer.
- s.40A(3) — a business cash payment exceeding ₹10,000 per day per payee is fully disallowed as a deduction (₹35,000 for transporters). Rule 6DD lists narrow carve-outs.
- All three sections are evaluated on substance — splitting an amount across days, payees, vouchers or events does not avoid the section.
NOT financial advice - seek advice from a professional for your specific situation
Read the matching guide: Cash transaction limits →
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