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​Do you make ‘these’ mistakes in cash transactions?

Saturday - August 17, 2019 1:13 pm , Category : WTN SPECIAL
Use digital payment instead of cash payment
Use digital payment instead of cash payment

Know some rules before doing cash transaction

AUG 17 (WTN) - Since after the historic demonetization decision, Prime Minister Narendra Modi has been continuously appealing for increasing digital payment. In his speeches from time to time, Prime Minister Modi keeps on calling on the people of the country that instead of cash transactions, transactions should be done digitally. By the way, there has been a lot of trend towards digital payment in the country after the demonetization. As you know that there are several methods of payment are available on smartphone, people are adopting the digital payment method.

In his Independence Day speech this year, Prime Minister Modi once again emphasized the need to promote digital payments to the countrymen. Prime Minister Modi called on the merchants of the country and said that the traders should put on board 'Yes to Digital Payment, No to Cash Payment' on their shop. Actually, the Prime Minister Modi wants that cash transactions in the country should be least, and people can do more transactions in digital way. By doing this, there will be transparency in the transaction, at the same time it will curb corruption and control black money.

By the way, if you do more transactions in cash instead of digital payment, then for your information, let you know that there are some limitations of cash payment. These limits have been fixed by the Ministry of Finance and the Reserve Bank of India. If you use cash more than the prescribed limit, then not only you can face heavy penalty but you can also get a notice from the Income Tax Department. Let us tell you that what are the rules regarding cash transactions in the country at the moment?

First of all, for your information, let you know that there is no tax currently on cash withdrawal from bank accounts. But, in the first full budget of the second term of the Modi Government presented this year, there has been a big announcement about the tax on cash withdrawals. If you withdraw more than Rs 1 crore in cash from a bank account in a year, then TDS will be deducted at the rate of 2 per cent on it.

On the other hand, if you deposit cash in the bank, then there are some rules for it. If you are depositing more than Rs 50,000 in cash in a savings account, then you will have to provide the PAN card number. At the same time, if you are also making a pay order, or demand draft in cash, then you will have to provide the PAN card number.

If someone has deposited Rs 10 lakh or more in a savings account in a year, then the name of the depositor will go in the Annual Information Report. While this limit is Rs 10 lakh for a savings account, the limit for a current account is Rs 50 lakh.

For your information, let you know that at present there is no limit to keeping cash in the house. But, if there is any inquiry about the cash present at home, then the Income Tax Department will have to ask the source of the cash kept in the house. If the concerned person is not able to explain the source of the amount kept in the house, a penalty of up to 137 per cent can be imposed on the seized cash in such a case.

If you sell the property, then there is a limit to accept cash on it. According to the new rules, now only 20,000 rupees can be transacted in cash on sale of the property. If you get more than Rs 20,000 in cash on selling the property, then you can face a penalty of up to 100 per cent.

For your information, let you know that you can pay cash up to Rs 2 lakh for your personal expenses. At the same time, this limit for business expenses is only up to Rs 10,000. Spending more than this limit may ask for penalty.

As you know, there is a lot is spent in the weddings in India. According to the current rules, there is no fixed spending limit in marriages, but there are rules regarding the use of cash in marriage. If a person expends more than Rs 2 lakh in marriage, or any other work, then the name of the person concerned will go to the Income Tax Department. If needed, the Income Tax Department can ask the source of the money from the concerned person. On the other hand, if the answer of the source of the amount is not satisfactory, then the tax and interest can be levied at the rate of 78 per cent on that amount.

There is also a limit to the amount of cash in gift. You can give less than Rs 2 lakh in cash as gift to any of your relatives, but if more than this amount is given in cash, then cash gift can be fined 100 per cent penalty. At the same time, cash can only be given up to Rs 50,000 to anyone other than relatives. In such a situation, we advise you to pay as much as you can in the most digital way, which will not only help you, but will also save you from the trouble of cash and you will not have to face the action of Income Tax Department.