{"id":3895,"date":"2025-08-09T17:22:24","date_gmt":"2025-08-09T17:22:24","guid":{"rendered":"https:\/\/tezgyan.com\/index.php\/2025\/08\/09\/from-rs-2-lakh-cash-cap-to-rs-5k-donation-limit-7-cash-rules-that-can-attract-100-penalty-tax-news\/"},"modified":"2025-08-09T17:22:24","modified_gmt":"2025-08-09T17:22:24","slug":"from-rs-2-lakh-cash-cap-to-rs-5k-donation-limit-7-cash-rules-that-can-attract-100-penalty-tax-news","status":"publish","type":"post","link":"https:\/\/tezgyan.com\/index.php\/2025\/08\/09\/from-rs-2-lakh-cash-cap-to-rs-5k-donation-limit-7-cash-rules-that-can-attract-100-penalty-tax-news\/","title":{"rendered":"From Rs 2 Lakh Cash Cap To Rs 5K Donation Limit: 7 Cash Rules That Can Attract 100% Penalty | Tax News"},"content":{"rendered":"<p><br \/>\n<\/p>\n<div id=\"story-9493597\">\n<p><span class=\"jsx-730caffcddfd709\">Last Updated:<\/span><time class=\"jsx-730caffcddfd709\">August 09, 2025, 08:20 IST<\/time><\/p>\n<h2 id=\"asubttl-9493597\" class=\"jsx-4625396a04d15488 jsx-84921212 asubttl-schema\">The Income Tax Department has tightened rules on cash transactions to curb black money, including limits on cash acceptance, loans, repayments, and donations.<\/h2>\n<div class=\"jsx-45a692afa6f47900 artsharwrp\">\n<div id=\"artshare\" class=\"jsx-45a692afa6f47900 artshare\">\n<div class=\"jsx-45a692afa6f47900 stickdiv\">\n<div class=\"jsx-45a692afa6f47900 deskwrapstkdiv\">\n<div class=\"jsx-45a692afa6f47900 fontchange\"><img decoding=\"async\" src=\"https:\/\/images.news18.com\/dlxczavtqcctuei\/news18\/static\/images\/english\/font.svg\" height=\"30px\" width=\"30px\" alt=\"font\" class=\"jsx-45a692afa6f47900 lazyload\"\/><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<figure class=\"jsx-4625396a04d15488 jsx-84921212 amimg\"><img decoding=\"async\" alt=\"7 Cash Rules You Must Know: Violating These Can Attract 100% Penalty or TDS\" title=\"7 Cash Rules You Must Know: Violating These Can Attract 100% Penalty or TDS\" src=\"https:\/\/images.news18.com\/ibnlive\/uploads\/2021\/07\/1627283897_news18_logo-1200x800.jpg?impolicy=website&amp;width=400&amp;height=225\" loading=\"eager\" fetchpriority=\"high\" class=\"jsx-4625396a04d15488 jsx-84921212\"\/><\/p>\n<p>7 Cash Rules You Must Know: Violating These Can Attract 100% Penalty or TDS<\/p>\n<\/figure>\n<p><strong>7 Cash Rules:<\/strong> The Income Tax Department has tightened rules around cash transactions to ensure transparency and curb black money. Here are 7 key cash-related provisions under the Income Tax Act, which every individual and business owner must know \u2014 or risk heavy penalties.<\/p>\n<p>According to TaxBuddy.com, these sections of the Income Tax Act are often overlooked but carry strict consequences:<\/p>\n<h4>Section 269ST<\/h4>\n<p><strong>You cannot accept Rs 2 lakh or more in cash:<\/strong><\/p>\n<ul class=\"listOncontentArticleUL\">\n<li>From one person in a single day<\/li>\n<li>For a single transaction<\/li>\n<li>For a single occasion or event<\/li>\n<\/ul>\n<p>Penalty: 100% of the amount received (Section 271DA).<\/p>\n<h4>Section 269SS<\/h4>\n<p>Cash loans, deposits, or advances of Rs 20,000 or more are prohibited.<\/p>\n<p>Even if a friend lends you Rs 25,000 in cash during an emergency, it qualifies as a violation.<\/p>\n<p>Penalty: Equal to the amount accepted (Section 271D).<\/p>\n<h4>Section 269T<\/h4>\n<ul class=\"listOncontentArticleUL\">\n<li>Loan, deposit, or advance repayment in cash is restricted if the amount is Rs 20,000 or more.<\/li>\n<li>Whether repaid to an NBFC, bank, or friend, it must be done digitally.<\/li>\n<\/ul>\n<p>Penalty: Equal to the repaid amount (Section 271E).<\/p>\n<h4>Section 40A(3)<\/h4>\n<p>Businesses cannot claim deductions for cash expenses exceeding Rs 10,000 per person per day (Rs 35,000 for transporters).<\/p>\n<p>This disallows the expense for tax computation, leading to higher taxable income.<\/p>\n<h4>Section 80G<\/h4>\n<p>Cash donations above Rs 2,000 are not eligible for tax deductions.<\/p>\n<p>Only donations via bank channels (cheque, UPI, bank transfer) qualify.<\/p>\n<h4>Section 80D<\/h4>\n<p>Cash payment of health insurance premiums is not eligible for deduction.<\/p>\n<p>However, up to Rs 5,000 spent on preventive health check-ups in cash is allowed.<\/p>\n<div>\n<div class=\"twtiframe\">\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\" lang=\"en\">For an emergency, Rahul took a loan of \u20b91,20,000 from his friend in cashNow an income-tax penalty of \u20b91,20,000 looms over him\ud83e\udd2f<\/p>\n<p>Dealing in cash? Please BEWARE. Here are income-tax penalties that you may be exposed to\ud83e\uddf5\ud83d\udc47<\/p>\n<p>\u2014 TaxBuddy.com (@TaxBuddy1) <a href=\"https:\/\/twitter.com\/TaxBuddy1\/status\/1953463958871880014?ref_src=twsrc%5Etfw\" rel=\"nofollow\">August 7, 2025<\/a><\/p>\n<\/blockquote>\n<\/div>\n<\/div>\n<h4>Section 194N<\/h4>\n<p><strong>Banks will deduct TDS on large cash withdrawals:<\/strong><\/p>\n<ul class=\"listOncontentArticleUL\">\n<li>2% if annual withdrawal exceeds Rs 1 crore<\/li>\n<li>5% if no ITR filed for 3 years and withdrawal exceeds Rs 20 lakh<\/li>\n<\/ul>\n<p>Taxpayers must ensure compliance with these cash rules to avoid steep penalties or TDS deductions.<\/p>\n<div class=\"jsx-95088aad1b3c53cd atawrap\">\n<div class=\"jsx-95088aad1b3c53cd atadetailwrp\">\n<div class=\"jsx-95088aad1b3c53cd ataname\"><span class=\"jsx-95088aad1b3c53cd atthumb\"><\/p>\n<figure class=\"jsx-95088aad1b3c53cd\"><img decoding=\"async\" alt=\"authorimg\" src=\"https:\/\/images.news18.com\/ibnlive\/uploads\/2025\/02\/WhatsApp-Image-2025-02-11-at-14.38.33-2025-02-47cdd4fd31681cc3efe5087cb8bd1418.jpeg?impolicy=website&amp;width=60&amp;height=60\" class=\"jsx-95088aad1b3c53cd\"\/><\/figure>\n<p><\/span><\/p>\n<div class=\"jsx-95088aad1b3c53cd attitle\"><a href=\"https:\/\/www.news18.com\/byline\/varun-yadav-28203.html\" class=\"jsx-95088aad1b3c53cd atamail\">Varun Yadav<\/a><\/p>\n<p>Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst&#8230;<span class=\"jsx-95088aad1b3c53cd aurpdebtn\">Read More<\/span><\/p>\n<\/div>\n<\/div>\n<p>Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst&#8230;<!-- --> <span class=\"jsx-95088aad1b3c53cd aurpdebtn\">Read More<\/span><\/p>\n<\/div>\n<\/div>\n<div class=\"jsx-4625396a04d15488 jsx-84921212 artcta\">Stay updated with all the latest business news, including\u00a0<a href=\"https:\/\/www.news18.com\/business\/markets\/\">market trends<\/a>,\u00a0<a href=\"https:\/\/www.news18.com\/topics\/stocks-to-watch\/\">stock updates<\/a>,\u00a0<a href=\"https:\/\/www.news18.com\/business\/tax\/\">tax<\/a>, IPO,\u00a0<a href=\"https:\/\/www.news18.com\/business\/banking-finance\/\">banking finance<\/a>, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates\u2014only on News18. Also\u00a0<span data-olk-copy-source=\"MessageBody\">Download the\u00a0<a href=\"https:\/\/onelink.to\/eng-article-eop\">News18 App<\/a>\u00a0to stay updated!<\/span><\/div>\n<p><span class=\"jsx-4625396a04d15488 jsx-84921212 coral-count-custom\">view comments<\/span><\/p>\n<div class=\"jsx-4625396a04d15488 jsx-84921212 brdcrmb\"><a href=\"https:\/\/www.news18.com\/\">News<\/a>  <a href=\"https:\/\/www.news18.com\/business\/\">business<\/a> \u00bb  <a href=\"https:\/\/www.news18.com\/business\/tax\/\">tax<\/a>  <span class=\"brdout\"> From Rs 2 Lakh Cash Cap To Rs 5K Donation Limit: 7 Cash Rules That Can Attract 100% Penalty<\/span><\/div>\n<div id=\"coral-wrap\" class=\"jsx-9278cad478d6a6dc \">\n<div class=\"jsx-9278cad478d6a6dc coral-cont\">\n<div class=\"jsx-9278cad478d6a6dc coltoptxt\">Disclaimer: Comments reflect users\u2019 views, not News18\u2019s. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. 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By posting, you agree to our <a href=\"https:\/\/www.news18.com\/disclaimer\/\" class=\"jsx-9278cad478d6a6dc\">Terms of Use<\/a> and <a href=\"https:\/\/www.news18.com\/privacy_policy\/\" class=\"jsx-9278cad478d6a6dc\">Privacy Policy<\/a>.<\/div>\n<\/div>\n<\/div>\n<p><span class=\"jsx-4625396a04d15488 jsx-84921212 rmbtn news18_read_more\">Read More<\/span><\/p>\n<\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/><br \/>\n<br \/><a href=\"https:\/\/www.news18.com\/business\/tax\/from-rs-2-lakh-cash-cap-to-rs-5k-donation-limit-7-cash-rules-that-can-attract-100-penalty-ws-l-9493597.html\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Last Updated:August 09, 2025, 08:20 IST The Income Tax Department has tightened rules on cash transactions to curb black money, including limits on cash acceptance, loans, repayments, and donations. 7 Cash Rules You Must Know: Violating These Can Attract 100% Penalty or TDS 7 Cash Rules: The Income Tax Department has tightened rules around cash&#8230;<\/p>\n","protected":false},"author":1,"featured_media":3896,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[],"class_list":["post-3895","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/posts\/3895","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/comments?post=3895"}],"version-history":[{"count":0,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/posts\/3895\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/media\/3896"}],"wp:attachment":[{"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/media?parent=3895"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/categories?post=3895"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tezgyan.com\/index.php\/wp-json\/wp\/v2\/tags?post=3895"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}