Now cash transactions of more and more will be heavy tax? Learn a new update! Cash Transaction New Limit 2025

The Government of India has implemented several strict rules on cash transactions to curb black money in recent years and promote digital payments. New of 2025 Income tax bill These rules have been made even more strict. Its purpose is to bring transparency in financial transactions and prevent unauthorized cash transactions.

In this article, we will discuss in detail about the new rules applied to cash transactions, their limits, and punishment for violations. Also, we will know how these rules affect individual and professional taxpayers.

What are the new rules on cash transactions?

The limit of cash transactions has been set under the Income Tax Act in India. If a person or business violates these limits, he may have to pay heavy fines.

Main Rules:

1. Getting more than ₹ 2 lakh cash: In any one day, getting ₹ 2 lakh or more cash from a person is prohibited.
2. More than ₹ 20,000 cash loan or deposit: Taking or returning any type of loan or deposit in more than ₹ 20,000 cash is prohibited.
3. More than ₹ 10,000 cash expenditure: more than ₹ 10,000 cash spending for businesses will not be considered taxable.
4. More than ₹ 50 lakh cash deposit: Reporting is mandatory on depositing more than ₹ 50 lakh in bank account.

Summary of Cash Transaction Limit (Table)

Penalty on cash transaction

If you violate the above rules, you may face heavy punishment.

Major punishment:

1. Violation of section 269st: If a person receives ₹ 2 lakh or more cash, he will be fined equal to the amount received.
2. Violation of Section 269SS: If a person takes more than ₹ 20,000 cash loan or deposits, he will have to pay an equal fine to the entire amount.
3. Section 40A (3): If the business spends more than ₹ 10,000 cash, it will not be taxed tax.
4. Section 194N: If a person has withdrawn more than ₹ 1 crore cash in a financial year, then 2% TDS will be applicable.

Main section applied to cash transactions

Why are cash transactions limited?

The government has given many reasons behind limiting cash transactions:

• Prevention of black money: Cash transactions promote black money on a large scale.
• Promotion of digital payments: The use of digital mediums increases transparency and convenience.
• Stopping tax evasion: It is difficult to keep a record of cash transactions, which leads to tax evasion.
• Economic Development: Digital pays gives impetus to the economy.

How will individual and business taxpayers be affected?

Personal Taxpayer:

• Large amounts can now be transacted only by banking mediums such as checks, demand drafts or online transfer.
• The use of cash while buying or selling property is limited.

Business Taxpayer:

• It has become mandatory to keep a record of all commercial expenses.
• Electronic payment system is being encouraged to adopt.

How to follow these rules?

The following steps can be taken to follow these rules:

• All major transactions should be done through banking mediums.
• Keep the correct record of all your expenses and income.
• Adopt digital payment systems such as UPI, NEFT, RTGS etc.
• Seek regular advice from your chartered accountant or tax advisor.

Important tips

• Never divide large amounts into small parts and take it in cash. Doing so would also be considered a violation of the law.
• While depositing large amount in bank accounts, keep evidence of its source.
• Use only banking mediums while buying or selling property.

conclusion

These new rules imposed on cash transactions are a major step from the Government of India to promote financial transparency and digital economy.

Following these rules will not only save you from legal problems but will also make your financial transactions safe.

Disclaimer: This article is written only for the purpose of providing information. Please consult your tax advisor before taking any decision.