In today’s busy world, each and every person wants some income tax exemptions through their salary or profession. Also, to make India cashless and bring it out of corruption, the government is trying every possible way. Now the IT (Income Tax) department has again come up with something in which it warned the people to avoid large cash transactions which will result in the charge of penalty or no tax exemption.
Below Transactions Not Eligible for Income Tax Exemptions
- One must not accept cash of Rs 2 lakh or more from a single person in a day and for any event or occasion, one or more transactions must not be done. For such transactions, instead of cash people are advised to use an account payee cheque or account payee bank draft or use of electronic clearing system via a bank account. This restriction is not applied to the government, post office savings bank, any banking company, or a person notified by the Central Government or cooperative bank. Section 271DA of the IT Department will charge the income tax penalty if the person goes against Section 269ST and receives the amount. The penalty charged will be equal to the amount written on such a receipt. But the penalty will not be charged if the person proves himself innocent.
- For the transfer of secured property, do not pay or receive a specified sum of cash of Rs 20,000 or more. Instead of cash, people are advised to use an account payee cheque or account payee bank draft or use of electronic clearing system via a bank account. “Specified sum” means if any sum is received as advance or otherwise, in relation to the transfer of immovable property, whether or not the transfer takes place. If you go against the law which is under Section 269SS, then the penalty will be charged under Section 271D. The penalty under section 271D will be charged on the deposit taken or accepted or an amount equal to the loan.
Read Also: Save Your Income Tax by Following Very Simple Steps
- Do not pay cash of more than Rs 10,000 related to the expenditure of profession/business. Instead of cash people are advised to use an account payee cheque or account payee bank draft or use of electronic clearing system via bank account and if they pay an amount more than 10,000 in any mode other than mentioned above then there will be no exemption allowed such expenditure in the profit or loss account.
- Do not donate more than Rs 2,000 in cash to a political party or registered trust. Instead of cash, people are advised to use an account payee cheque or account payee bank draft or use of electronic clearing system via a bank account. And if you pay in cash then you will not be allowed for deduction under section 80G of the IT Act and strict actions will be taken against the political party or trust for encouraging such a step.
- Health insurance premiums must not be paid in cash. And if you do so then you will not be allowed deductions under Section 80D of the IT Act.
