With effective from 1st April, 2017, no person shall receive an amount ofRs 2 Lakh or more; (A) in aggregate from a person in a day (or) (B)

With effective from 1st April, 2017, no person shall receive an amount ofRs 2 Lakh or more; (A) in aggregate from a person in a day (or)(B) in respect of a single transaction (or)(C) in respect of transactions relating to one event or occasion from a person.

A.Single Person: Cash Receipt of Rs 2 lakh or more, from asingle person in a day is not allowed even if the amount has been paid through multiple transactions during the day which are below Rs 2 lakh. For example: Mr Viratbuys a gold chain worth Rs 2 Lakh and pays the amount by cash to Mr Sonesh on a single day in 4 equal installments of Rs 50,000 each. As Mr Sonesh accepted cash worth Rs 2 Lakh from a single person and in a single day, section 269ST is applicable in this case. Sonesh has to pay a penalty of Rs 2 Lakh.

B. Single Transaction:
Cash receipts of Rs 2 Lakh or more which are related to a single transaction are prohibited.For example: Mr Kejriwal goes through a medical surgery and the hospital charges him a bill of Rs 4 Lakh. Kejriwal clears the bill in 4 installments of Rs 1 Lakh each on four different dates. Here, the cashreceipts got by hospital are less than Rs 2 Lakh and have been received on different dates. Whether this transaction violates section 269ST? – Yes. Hospital has to pay the penalty. Because, they received the payments with respect to single bill / transaction. So, splitting of payments over several days is prohibited.

C. Single Event / Occasion:
Cash transactions or cash receipts related to a single event or occasion, can not be more than Rs 2 Lakh. For example: Nagachaitanya gets married to Samantha. On their wedding occasion, their relatives gifted Cash amount worth Rs 10 Lakh on different dates. Even if we assume that each person has gifted cash worth less than Rs 2 Lakh, are these receipts come under the purview of Section 269ST? Is penalty applicable? Yes, penalty can be levied. Here, marriage is a ‘single occasion’ and cash gifts worth Rs 2 Lakh or morecan not be received from relatives and other persons.