Income Tax: Sections 269ST, 269SS, and 269T

Hello Everyone! How are you? The section I am going to conduct in today's class is a very important section Okay Chances that question based on these provisions may come in your exam is very very high In today's class we will do 3 sections 269SS, 269T and 269ST This section, the 269ST, is important So we will start from here with 269ST, and then we will do 269SS and 269T What is this 269ST? You cannot take payment of ₹2 lakh or above You cannot take payment of ₹2 lakh or above in cash through bearer check or crossed cheque You cannot take If you want to take payment of ₹2 lakh or above, then how will you have to take it? You will have to do so through account payee cheque, account payee draft or through ECS means online payment You have read Section 48A(3), what was there in the section? That section says that you can do give a payment of more than ₹10,000 This was there, wasn't it?, that you can do the payment more than ₹10,000 in cash, with a bearer cheque, or with a cross cheque and what is there in this point that you cannot take payment of ₹2 lakh or above Again There was the > ₹10,000, remember it > ₹10,000 What's here? Greater is equal to ₹2 lakh ₹2 lakh limit for giver and for receiver it is ₹10,000 limit Okay, so, we cannot accept payments above ₹2 lakh What usually happened before? and this provision, when did it come? It came after Modi ji's government came into power What used to happen before? People used to buy jewelry and would give the jeweler ₹5 lakh in cash and they take the jewelry, and the jeweler would also take it Can a jeweler take it today? No, he cannot So, basically, the government attempted to control black money Now people think, what will they do if they have black money We if go anywhere to make payments above ₹2 lakh Will anyone accept it? No one will accept it because there is law Section 269ST It is said that you cannot accept cash payments of ₹2 lakh or more Okay, if we accept it then? So, whatever amount is accepted, an equivalent penalty will be imposed Let's say we run a car showroom Alright, someone came to my car showroom and liked a car worth ₹8 lakh They bought it and paid ₹8 lakh in cash He took the car and left, he left ₹8 lakh in cash Now the government says that you have taken ₹8 lakh in cash, which is more than ₹2 lakh I said "Yes" then government told me to pay an ₹8 lakh penalty So, the money he had given, I took it and gave it to the government, and he also took the car and left What kind of business is this of mine? The money that came, the government took it, and they're saying that a penalty of 100% has been imposed, they take the entire amount as a penalty from you and the buyer also took the car and left So, is someone really running such a business? No they don't So, now the person who gave us ₹8 lakh in cash, him too in collecting cash, not interested in accumulating black money either He's saying that even if you've got sacks full of cash, what good is it? The other party won't accept cash payments above ₹2 lakh anyway It's making sense now So basically, there's an attempt to control the black economy to some extent by imposing this limit Right? So, this section is very important for businesses, and every businessman needs to pay attention to Section 269ST That's why it's an important provision even for exams Let's learn this Restriction on Receipt of Cash exceeding ₹2 lakh [Sec. 269ST] We will do these top two sections later Alright, this was important, so, I said, let's start the fresh class from here No person shall receive an amount of ₹2 lakh or more The meaning of ₹2 lakh or more is ≥ ₹2 lakh or more In aggregate from a person in a day In one day, you cannot take more than ₹2 lakh from anyone Now, I am a businessman, okay I made the bill for him, bill A is ₹50,000 Bill number B is ₹60,000 Bill number C is, ₹70,000 and bill number D is, ₹80,000 Okay, how much is the total now? It's ₹2.60 lakh We issued 4 bills, and I receive a receipt for this I receive a receipt for these 4 bills of ₹2.60 lakh in cash Alright, the amount received on same day the bills were issued on different days: November 5, 2023 November 8, 2023 December 12, 2023 and February 1, 2024 The payment is received on February 5, 2024, in full ₹2.60 lakh in cash Tell me quickly, will there be a penalty, has non-compliance occurred, Section 269ST? Your default has occurred Section 269ST will be applicable on you Okay, a penalty will be imposed, a 100% penalty The government will levy a 100% penalty on you The government will take the full ₹2.60 lakh from you The money you received that belongs to the government Understood? So, why did I say this now? because when you were reading 40A(3) there, you were reading it in this way The bill should be more, around ₹10,000, and the payment should also be more It's not like that here Here, it's directly saying that you cannot take more than ₹2 lakh from one person in one day and you don't mean anything by this money, that you cannot take more than ₹2 lakh in cash from one person in one day, by bearer cheque, or by crossed cheque Is everyone clear about the matter now? Now, you can't say that these are small, multiple payments coming in, No Not taking more than ₹2 lakh or more from one person in one day Second Cannot take in respect of a single transaction This is all different These are all different things, and this is not the whole thing In respect of a single transaction, you cannot take more than ₹2 lakh What does this mean? I had only made one bill, the bill number is 512 How much? ₹2 lakh Okay and against this bill, it has given me this bill dated January 5, 2024 It paid me in cash on January 12, 2024, ₹50,000 and then again on January 15, 2024, It gave me cash, ₹1.50 lakh Quickly tell, cash less than ₹2 lakh has been taken Here, ₹50,000 was taken, and there, ₹1.50 lakh were taken Will Section 269ST will be applicable? The answer is yes, Section 269ST, is applicable You cannot take more than ₹2 lakh in cash for any one thing Pay attention, here I took more than ₹2 lakh in respect of a single transaction Now, did you understand what the first point was? The first point was that you cannot take more than ₹2 lakh in cash in one day That was the first point The second point says that for a single transaction, you cannot take more than ₹2 lakh in cash Have you taken more than ₹2 lakh in cash for a single transaction? Yes You took it in one day, that doesn't mean anything. Have you taken more than ₹2 lakh in cash for a single transaction? Yes, it was a single transaction, in respect of that, I took more than ₹2 lakh in cash Did you understand? Now let's change this question Suppose this wasn't cash, it was ₹50,000 from the bank, and what kind of transaction is this? This is an ECS transaction In respect of a single transaction, have you taken more than ₹2 lakh in cash? No I had taken ₹1.50 lakh in cash, and ₹50,000 through ECS So now, Section 269ST, will not be applicable Section 269ST is not applicable in this case In the case of transactions with red pen, Section 269ST, is not applicable Alright, third In respect of transaction relating to one event or occasion from a person Okay, you cannot receive more than ₹2 lakh in respect of any one event or occasion from any individual What does it means? What was the event? Who I am? I am a lawn provider who provide lawns for weddings So, I provided a lawn on rent to a person for ₹2.50 lakh Okay So, at the time of booking the lawn, he gave me ₹1.25 lakh out of the ₹2.50 lakh and then, when the wedding happened, he gave the remaining ₹1.25 lakh how much money did you get in total? ₹2.50 lakh come up in the context of an event? Yes, he never gave more than ₹2 lakh in cash, but it was received in respect of a single event If it's more than ₹2 lakh, then now what will be in my hands, Section 269ST will be applicable Okay, who is 269ST applicable to? Pay attention, it is on the receiver The businessman who is receiving the money, 269ST is applicable on them 269ST is applicable for the recipient, not the payer because if we control the recipient as well and don't allow them to receive, then what will the other party do? Carry black money around in his pocket, He won't be able to spend it anywhere Okay, think like this I am a lawn owner I rented out the lawn for ₹1.50 lakh, I charged him ₹50,000 for the flower decoration and he gave me separate ₹1.50 lakh each day Then he gave ₹50,000 the next day Okay There were two separate invoices Okay, listen carefully there were two separate invoices One invoice was for the lawn, and the other invoice was for the flower decoration and separate payments were made for both but pay attention, what was the event? It was a single event, a wedding It was indeed for the wedding, both for the lawn and the flower decoration for the wedding Even if more than ₹2 lakh in cash is received related to any single event, then also I will still be subject to Section 269ST So, see when does section 269ST apply? If we take ₹2 lakh or more in one day, even if it's through 10 invoices, section 269ST will be applicable It means not to take ₹2 lakh or more from any one person in a single day Secondly, if more than ₹2 lakh comes in respect of multiple bills in one day, exceeding ₹2 lakh in one day, then section 269ST will be applicable What is second case? That there was only one bill, one single transaction, of ₹2 lakh or more You have taken payment in installments You took it in amounts of ₹25,000 each but in respect of one single transaction even if you take more than ₹2 lakh in total as cash, then also section 269ST will be applicable What is the third case? In respect of one event, today 4 invoices were generated, 4 different payments were made He is saying that doesn't mean anything Even in respect of one event, if you have taken ₹2 lakh or more in cash You will still be subject to section 269ST Okay Otherwise than by, I received payment other than by an account payee cheque or an account payee bank draft or through the use of electronic clearing system otherwise these things, it means how we received the payment? Either we received the payment in cash, or we received it through bearer cheque, or how we received the payment, we received it through a cross cheque So, then also it will applicable Okay Provided that the provisions of this section shall not apply to This section will not apply to the government It means the government can take as much payment in cash as it wants (b) Any banking company, post office or co-operative bank Cooperative societies and the post office can also take as much cash as they want If penalty will be imposed on the bank, then it will create a matter, the bank is taking cash all day long So, the government can take it, financial institutions can take it Banking companies, post offices, and cooperative banks can also take it Alright, I said financial institutions but not all, banking companies, post offices, and cooperative banks only Okay Earlier, if you know, first insurance companies and such companies used to take cash So, people used to get insurance in cash Agents of insurance companies used to come and say they would accept black money, just give cash to us, we'll take care of it Do those people still can do it? No Bank, Post Office, Cooperative Bank are the only places where you can deposit cash If a person receives only sum in contravention of the provisions of Sec. 269ST It won't be "only sum," it will be "any sum" Any sum If a person receives any sum in contravention of the provisions of Sec. 269ST, he shall be liable to pay, by way of penalty, a sum equal to 100% of amount involved As much money is involved, that much penalty will be applied Means whatever money comes, the entire penalty will be deducted Now, I will tell you one practical difficulty What happens in this? Actually The big wholesalers, you know how they do business if I tell you, Then you will understand what the practical difficulty of the practical market is So, what do wholesalers do? They sell goods to retailers Alright, on credit and they give their bank account to the retailer Okay Whether they are a retailer from nearby villages or a nearby cities and we tell them that whenever money comes to you, after selling goods, keep depositing the money Okay Make full payment within 2 months Right Now, the bank account is with the retailer The retailer received a collection of, let's say, ₹2.05 lakh He took that and deposited ₹2.05 lakh into the bank account Whose? Mine I am a wholesaler I had given the bank account details to the retailer I said, whenever your goods are sold, keep depositing the money into that He deposited ₹2.05 lakh into my account Tell me, what crime did I commit? He deposited cash into my account because he had my bank account details He has deposited ₹2.05 lakh in cash into my account I will have to pay the penalty of ₹2.05 lakh to the government This is what 269ST says So, you see, there has to be an alert Those businessmen has to be on alert who have given their bank details to the customer and said, "Deposit money whenever you want," they also need to be alerted So, pay attention that they don't deposit more than ₹2 lakh Another important thing is that they might be depositing the money in parts But you made one bill, I made a bill of ₹2 lakh Even if they give money in 10-10 thousand installments, 20 times, it adds up to ₹2 lakh Okay So, even if I take more than ₹2 lakh in cash in respect of one invoice, then what will happen? This will make section 269ST applicable Alright Now you need to understand this too, student I don't know if they get this If I received cash in hand or someone deposited cash into my account, both are considered cash receipts Do you get what I'm saying? It is not that any of my customers will go to my bank and deposit money so that's a bank receipt No Whether you hand over the cash to me or go and deposit the cash in my account, what is the difference between the two for me? Cash Receipt and 269ST will become applicable Let's do a few more examples of Section 269ST Following instances are violation of Sec. 269ST A violation of Section 269ST has occurred alright, penalties will be imposed in these cases These are all penalty cases First If you receive ₹2 lakh on one single date against 5 different invoices of ₹40,000 each Five bills of ₹40,000 each were made, totaling ₹2 lakh, which came in cash all at once Will Section 269ST be applicable? Yes, it will be applicable A violation of Section 269ST has occurred here Why? Because ₹2 lakh has been aggregated in a day Okay Alright, if even one bill is made for ₹2 lakh and money comes in installments of ₹20,000 each over 10 days, then? Then it will still be considered a violation Why? Because even in respect of one single transaction, taking ₹2 lakh or more in cash is not allowed Taking ₹2 lakh or more in one day is not allowed, not even in respect of one transaction It means, the total of one transaction cannot exceed ₹2 lakh or more Alright, so this is also a violation If you collect ₹1.50 lakh on one day & ₹50,000 on another day towards decoration for an event Worked on decoration for one event, took ₹1.50 lakh on one day, and ₹50,000 on another day But in respect of one event, you cannot take this entire amount Alright, now this is the problem that I had mentioned to you earlier that any cash deposited directly into your bank accounts Someone has deposited cash into my account, maybe a customer or someone else of ₹2 lakh or more in a day or with respect to a single transaction More than ₹2 lakh were deposited into my account in one day or I made a bill of ₹2 lakh, and in respect of that, ₹10,000 were paid Cash deposited in respect of single transaction Which was more than ₹2 lakh So, my matter ends now Okay So, don't provide bank account details to the customer Now, you can't say that the customer accidentally deposited money what should I do? No, penalty will be imposed, income tax does not accept anything Last point is Cash gift of ₹2 lakh or more received from a person on occasion of marriage First, let me tell you one thing, whatever cash gift you receive at a wedding, it's all tax-free Okay, I will explain it to you in Income from other sources Okay Whatever cash envelopes, money, or gifts you receive at a wedding, all of it is non taxable Even a rupee is not charged as tax Many people do tax planning I have huge accumulated black money, we will say that we got a gift on our wedding So, weddings are an opportunity to convert black money into white money Alright, if you're not declaring the money you're earning, even if you're not paying taxes, you can always say you received gifts at the wedding If someone asks who gave it, just say, How would I know? We were sitting there, and people kept coming and giving envelopes When we opened one envelope, there was ₹1 lakh inside, and when we opened another, there was ₹50,000 Okay everything is tax free But If there is cash of ₹2 lakhs or more, then Section 269ST, will be applicable I.e. if a cash gift of ₹2 lakh or more is received in one envelope then the envelope will not be considered as yours, the wedding is yours, but that envelope will go to Mr. Modi ji That envelope belongs to the government If you receive cash of ₹2 lakh or more for a wedding, it will incur a penalty under Section 269ST Cash gift of ₹2 lakh or more received from a person on occasion of marriage From a person, okay Okay, there shouldn't be any confusion If it's come from 20 people in denominations of ₹10,000 each, then no 269ST, will be applicable If more than ₹2 lakh cash is received from any one person at a wedding, So, if ₹2 lakh or more cash is received, like if you came to my wedding and gave ₹2.50 lakh in cash Okay So, is this ₹2.50 lakh considered as tax-free income or taxable income for me? This is tax-free income No tax will be applicable on this But there will be a penalty of ₹2.50 lakh under Section 269ST Full ₹2.50 lakh This means that the entire amount will be levied as a penalty Income except for income from gifts received during weddings is tax-free, all gifts received during weddings are tax-free No tax has to be paid Just remember to ensure that no one gives more than ₹2 lakh If someone is giving, like your father-in-law who is giving you ₹2 lakh in cash, then don't accept it I'm humbly requesting you with folded hands You can give me ₹1.99 lakh Okay Don't give ₹2 lakh If you need to give something, just give me the jewelry or give something else Alright, otherwise, a penalty will be imposed, there is no tax on this income, this income is not taxable These are two small sections; there is nothing to do in them Restriction on Accepting Loan Prohibition on accepting loan other than by Account Payee Cheque/Draft/ECS in excess of ₹20,000 If you take a loan of more than ₹20,000 then you cannot take it in cash, you have to take it through account payee cheque, draft, or ECS and if you're repaying that loan then you must keep in mind that if you're making a repayment of a loan over ₹20,000 it should also be through an account payee cheque, draft, or ECS (Electronic Clearing System) Okay There's a prohibition on taking a loan over ₹20,000 in cash, and you can't repay a loan over ₹20,000 in cash either Sections 269SS and 269T address this Alright, this provision exists, and there are penalties associated with it, if you engage in such actions, you don't have to read all that Those details aren't part of your course So this was just theoretical stuff This is what could lead to a practical problem under 269ST Let's wrap up today's class here Thank you so much!

Hello Everyone! How are you? The section I am going to conduct in today&#39;s class is a very important section Okay Chances that question based on these provisions may come in your exam is very very high In today&#39;s class we will do 3 sections 269SS, 269T and 269ST This section, the 269ST, is important  So we will start from here with 269ST, and then we will do 269SS and 269T What is this 269ST? You cannot take payment of ₹2 lakh or above You cannot take payment of ₹2 lakh or above in cash through bearer check or crossed cheque You cannot take If you want to take payment of ₹2 lakh or above, then how will you have to take it? You will have to do so through account payee cheque, account payee draft or through ECS means online payment You have read Section 48A(3), what was there in the section? That section says that you can do give a payment of more than ₹10,000 This was there, wasn&#39;t it?, that you can do the payment more than ₹10,000 in cash, with a bearer cheque, or with a cross cheque and what is there in this point that you cannot take payment of 
₹2 lakh or above Again There was the &gt; ₹10,000, remember it &gt; ₹10,000 What&#39;s here? Greater is equal to ₹2 lakh ₹2 lakh limit for giver and for receiver it is ₹10,000 limit Okay, so, we cannot accept payments above ₹2 lakh What usually happened before? and this provision, when did it come? It came after Modi ji&#39;s government came into power What used to happen before? People used to buy jewelry and would give the jeweler ₹5 lakh in cash and they take the jewelry, and the jeweler would also take it Can a jeweler take it today? No, he cannot So, basically, the government attempted to control black money Now people think, what will they do if they have black money We if go anywhere to make payments above ₹2 lakh Will anyone accept it? No one will accept it because there is law Section 269ST It is said that you cannot accept cash payments of ₹2 lakh or more Okay, if we accept it then? So, whatever amount is accepted, an equivalent penalty will be imposed Let&#39;s say we run a car showroom Alright, someone came to my car showroom and liked a car worth ₹8 lakh They bought it and paid ₹8 lakh in cash He took the car and left, he left ₹8 lakh in cash Now the government says that you have taken ₹8 lakh in cash, which is more than ₹2 lakh I said &quot;Yes&quot; then government told me to pay an ₹8 lakh penalty So, the money he had given, I took it and gave it to the government, and he also took the car and left What kind of business is this of mine? The money that came, the government took it, and they&#39;re saying that a penalty of 100% has been imposed, they take the entire amount as a penalty from you and the buyer also took the car and left So, is someone really running such a business? No they don&#39;t So, now the person who gave us ₹8 lakh in cash, him too in collecting cash, not interested in accumulating black money either He&#39;s saying that even if you&#39;ve got sacks full of cash, what good is it? The other party won&#39;t accept cash payments above ₹2 lakh anyway It&#39;s making sense now So basically, there&#39;s an attempt to control the black economy to some extent by imposing this limit Right? So, this section is very important for businesses, and every businessman needs to pay attention to Section 269ST That&#39;s why it&#39;s an important provision even for exams Let&#39;s learn this Restriction on Receipt of Cash exceeding ₹2 lakh [Sec. 269ST] We will do these top two sections later Alright, this was important, so, I said, let&#39;s start the fresh class from here No person shall receive an amount of ₹2 lakh or more The meaning of ₹2 lakh or more is ≥ ₹2 lakh or more In aggregate from a person in a day In one day, you cannot take more than ₹2 lakh from anyone Now, I am a businessman, okay I made the bill for him, bill A is ₹50,000 Bill number B is ₹60,000 Bill number C is, ₹70,000 and bill number D is, ₹80,000 Okay, how much is the total now? It&#39;s ₹2.60 lakh We issued 4 bills, and I receive a receipt for this I receive a receipt for these 4 bills of ₹2.60 lakh in cash Alright, the amount received on same day the bills were issued on different days: November 5, 2023 November 8, 2023 December 12, 2023 and February 1, 2024 The payment is received on February 5, 2024, in full ₹2.60 lakh in cash Tell me quickly, will there be a penalty, has non-compliance occurred, Section 269ST? Your default has occurred Section 269ST will be applicable on you Okay, a penalty will be imposed, a 100% penalty The government will levy a 100% penalty on you The government will take the full ₹2.60 lakh from you The money you received that belongs to the government Understood? So, why did I say this now? because when you were reading 40A(3) there, you were reading it in this way The bill should be more, around ₹10,000, and the payment should also be more It&#39;s not like that here Here, it&#39;s directly saying that you cannot take more than ₹2 lakh from one person in one day and you don&#39;t mean anything by this money, that you cannot take more than ₹2 lakh in cash from one person in one day, by bearer cheque, or by crossed cheque Is everyone clear about the matter now? Now, you can&#39;t say that these are small, multiple payments coming in, No Not taking more than ₹2 lakh or more from one person in one day Second Cannot take in respect of a single transaction This is all different These are all different things, and this is not the whole thing In respect of a single transaction, you cannot take more than ₹2 lakh What does this mean? I had only made one bill, the bill number is 512 How much? ₹2 lakh Okay and against this bill, it has given me this bill dated January 5, 2024 It paid me in cash on January 12, 2024, ₹50,000 and then again on January 15, 2024, It gave me cash, ₹1.50 lakh Quickly tell, cash less than ₹2 lakh has been taken Here, ₹50,000 was taken, and there, ₹1.50 lakh were taken Will Section 269ST will be applicable? The answer is yes, Section 269ST, is applicable You cannot take more than ₹2 lakh in cash for any one thing Pay attention, here I took more than ₹2 lakh in respect of a single transaction Now, did you understand what the first point was? The first point was that you cannot take more than ₹2 lakh in cash in one day That was the first point The second point says that for a single transaction, you cannot take more than ₹2 lakh in cash Have you taken more than ₹2 lakh in cash for a single transaction? Yes You took it in one day, that doesn&#39;t mean anything. Have you taken more than ₹2 lakh in cash for a single transaction? Yes, it was a single transaction, in respect of that, I took more than ₹2 lakh in cash Did you understand? Now let&#39;s change this question Suppose this wasn&#39;t cash, it was ₹50,000 from the bank, and what kind of transaction is this? This is an ECS transaction In respect of a single transaction, have you taken more than ₹2 lakh in cash? No I had taken ₹1.50 lakh in cash, and ₹50,000 through ECS So now, Section 269ST, will not be applicable Section 269ST is not applicable in this case In the case of transactions with red pen, Section 269ST, is not applicable Alright, third In respect of transaction relating to one event or occasion from a person Okay, you cannot receive more than ₹2 lakh in respect of any one event or occasion from any individual What does it means? What was the event? Who I am? I am a lawn provider who provide lawns for weddings So, I provided a lawn on rent to a person for ₹2.50 lakh Okay So, at the time of booking the lawn, he gave me ₹1.25 lakh out of the ₹2.50 lakh and then, when the wedding happened, he gave the remaining ₹1.25 lakh how much money did you get in total? ₹2.50 lakh come up in the context of an event? Yes, he never gave more than ₹2 lakh in cash, but it was received in respect of a single event If it&#39;s more than ₹2 lakh, then now what will be in my hands, Section 269ST will be applicable  Okay, who is 269ST applicable to? Pay attention, it is on the receiver The businessman who is receiving the money, 269ST is applicable on them 269ST is applicable for the recipient, not the payer because if we control the recipient as well and don&#39;t allow them to receive, then what will the other party do? Carry black money around in his pocket, He won&#39;t be able to spend it anywhere Okay, think like this I am a lawn owner I rented out the lawn for ₹1.50 lakh, I charged him ₹50,000 for the flower decoration and he gave me separate ₹1.50 lakh each day Then he gave ₹50,000 the next day Okay There were two separate invoices Okay, listen carefully there were two separate invoices One invoice was for the lawn, and the other invoice was for the flower decoration and separate payments were made for both but pay attention, what was the event? It was a single event, a wedding It was indeed for the wedding, both for the lawn and the flower decoration for the wedding Even if more than ₹2 lakh in cash is received related to any single event, then also I will still be subject to Section 269ST So, see when does section 269ST apply? If we take ₹2 lakh or more in one day, even if it&#39;s through 10 invoices, section 269ST will be applicable It means not to take ₹2 lakh or more from any one person in a single day Secondly, if more than ₹2 lakh comes in respect of multiple bills in one day, exceeding ₹2 lakh in one day, then section 269ST will be applicable What is second case? That there was only one bill, one single transaction, of ₹2 lakh or more You have taken payment in installments You took it in amounts of ₹25,000 each but in respect of one single transaction even if you take more than ₹2 lakh in total as cash, then also section 269ST will be applicable What is the third case? In respect of one event, today 4 invoices were generated, 4 different payments were made He is saying that doesn&#39;t mean anything Even in respect of one event, if you have taken ₹2 lakh or more in cash You will still be subject to section 269ST Okay Otherwise than by, I received payment other than by an account payee cheque or an account payee bank draft or through the use of electronic clearing system otherwise these things, it means how we received the payment? Either we received the payment in cash, or we received it through bearer cheque, or how we received the payment, we received it through a cross cheque So, then also it will applicable Okay Provided that the provisions of this section shall not apply to This section will not apply to the government It means the government can take as much payment in cash as it wants (b) Any banking company, post office or co-operative bank Cooperative societies and the post office can also take as much cash as they want If penalty will be imposed on the bank, then it will create a matter, the bank is taking cash all day long So, the government can take it, financial institutions can take it Banking companies, post offices, and cooperative banks can also take it Alright, I said financial institutions but not all, banking companies, post offices, and cooperative banks only Okay Earlier, if you know, first insurance companies and such companies used to take cash So, people used to get insurance in cash Agents of insurance companies used to come and say they would accept black money, just give cash to us, we&#39;ll take care of it Do those people still can do it? No Bank, Post Office, Cooperative Bank are the only places where you can deposit cash If a person receives only sum in contravention of the provisions of Sec. 269ST It won&#39;t be &quot;only sum,&quot; it will be &quot;any sum&quot; Any sum If a person receives any sum in contravention of the provisions of Sec. 269ST, he shall be liable to pay, by way of penalty, a sum equal to 100% of amount involved As much money is involved, that much penalty will be applied Means whatever money comes, the entire penalty will be deducted Now, I will tell you one practical difficulty What happens in this? Actually The big wholesalers, you know how they do business if I tell you, Then you will understand what the practical difficulty of the practical market is So, what do wholesalers do? They sell goods to retailers Alright, on credit and they give their bank account to the retailer Okay Whether they are a retailer from nearby villages or a nearby cities and we tell them that whenever money comes to you, after selling goods, keep depositing the money Okay Make full payment within 2 months Right Now, the bank account is with the retailer The retailer received a collection of, let&#39;s say, ₹2.05 lakh He took that and deposited ₹2.05 lakh into the bank account Whose? Mine I am a wholesaler I had given the bank account details to the retailer I said, whenever your goods are sold, keep depositing the money into that He deposited ₹2.05 lakh into my account Tell me, what crime did I commit? He deposited cash into my account because he had my bank account details He has deposited ₹2.05 lakh in cash into my account I will have to pay the penalty of ₹2.05 lakh to the government This is what 269ST says So, you see, there has to be an alert Those businessmen has to be on alert who have given their bank details to the customer and said, &quot;Deposit money whenever you want,&quot; they also need to be alerted So, pay attention that they don&#39;t deposit more than ₹2 lakh Another important thing is that they might be depositing the money in parts But you made one bill, I made a bill of ₹2 lakh Even if they give money in 10-10 thousand installments, 20 times, it adds up to ₹2 lakh Okay So, even if I take more than ₹2 lakh in cash in respect of one invoice, then what will happen? This will make section 269ST applicable Alright Now you need to understand this too, student I don&#39;t know if they get this If I received cash in hand or someone deposited cash into my account, both are considered cash receipts Do you get what I&#39;m saying? It is not that any of my customers will go to my bank and deposit money so that&#39;s a bank receipt No Whether you hand over the cash to me or go and deposit the cash in my account, what is the difference between the two for me? Cash Receipt and 269ST will become applicable Let&#39;s do a few more examples of Section 269ST Following instances are violation of Sec. 269ST A violation of Section 269ST has occurred alright, penalties will be imposed in these cases These are all penalty cases First If you receive ₹2 lakh on one single date against 5 different invoices of ₹40,000 each Five bills of ₹40,000 each were made, totaling ₹2 lakh, which came in cash all at once Will Section 269ST be applicable? Yes, it will be applicable A violation of Section 269ST has occurred here Why? Because ₹2 lakh has been aggregated in a day Okay Alright, if even one bill is made for ₹2 lakh and money comes in installments of ₹20,000 each over 10 days, then? Then it will still be considered a violation Why? Because even in respect of one single transaction, taking ₹2 lakh or more in cash is not allowed Taking ₹2 lakh or more in one day is not allowed, not even in respect of one transaction It means, the total of one transaction cannot exceed ₹2 lakh or more Alright, so this is also a violation If you collect ₹1.50 lakh on one day &amp; ₹50,000 on another day towards decoration for an event Worked on decoration for one event, took ₹1.50 lakh on one day, and ₹50,000 on another day But in respect of one event, you cannot take this entire amount Alright, now this is the problem that I had mentioned to you earlier that any cash deposited directly into your bank accounts Someone has deposited cash into my account, maybe a customer or someone else of ₹2 lakh or more in a day or with respect to a single transaction More than ₹2 lakh were deposited into my account in one day or I made a bill of ₹2 lakh, and in respect of that, ₹10,000 were paid
Cash deposited in respect of single transaction Which was more than ₹2 lakh So, my matter ends now Okay So, don&#39;t provide bank account details to the customer Now, you can&#39;t say that the customer accidentally deposited money what should I do? No, penalty will be imposed, income tax does not accept anything Last point is Cash gift of ₹2 lakh or more received from a person on occasion of marriage First, let me tell you one thing, whatever cash gift you receive at a wedding, it&#39;s all tax-free Okay, I will explain it to you in Income from other sources Okay Whatever cash envelopes, money, or gifts you receive at a wedding, all of it is non taxable Even a rupee is not charged as tax Many people do tax planning I have huge accumulated black money, we will say that we got a gift on our wedding So, weddings are an opportunity to convert black money into white money Alright, if you&#39;re not declaring the money you&#39;re earning, even if you&#39;re not paying taxes, you can always say you received gifts at the wedding If someone asks who gave it, just say, How would I know? We were sitting there, and people kept coming and giving envelopes When we opened one envelope, there was ₹1 lakh inside, and when we opened another, there was ₹50,000 Okay everything is tax free But If there is cash of ₹2 lakhs or more, then Section 269ST, will be applicable I.e. if a cash gift of ₹2 lakh or more is received in one envelope then the envelope will not be considered as yours, the wedding is yours, but that envelope will go to Mr. Modi ji That envelope belongs to the government If you receive cash of ₹2 lakh or more for a wedding, it will incur a penalty under Section 269ST Cash gift of ₹2 lakh or more received from a person on occasion of marriage From a person, okay Okay, there shouldn&#39;t be any confusion If it&#39;s come from 20 people in denominations of ₹10,000 each, then no 269ST, will be applicable If more than ₹2 lakh cash is received from any one person at a wedding, So, if ₹2 lakh or more cash is received, like if you came to my wedding and gave ₹2.50 lakh in cash Okay So, is this ₹2.50 lakh considered as tax-free income or taxable income for me? This is tax-free income No tax will be applicable on this But there will be a penalty of ₹2.50 lakh under Section 269ST Full ₹2.50 lakh This means that the entire amount will be levied as a penalty Income except for income from gifts received during weddings is tax-free, all gifts received during weddings are tax-free No tax has to be paid Just remember to ensure that no one gives more than ₹2 lakh If someone is giving, like your father-in-law who is giving you ₹2 lakh in cash, then don&#39;t accept it I&#39;m humbly requesting you with folded hands You can give me ₹1.99 lakh Okay Don&#39;t give ₹2 lakh If you need to give something, just give me the jewelry or give something else Alright, otherwise, a penalty will be imposed, there is no tax on this income, this income is not taxable These are two small sections; there is nothing to do in them Restriction on Accepting Loan Prohibition on accepting loan other than by Account Payee Cheque/Draft/ECS in excess of ₹20,000 If you take a loan of more than ₹20,000 then you cannot take it in cash, you have to take it through account payee cheque, draft, or ECS and if you&#39;re repaying that loan then you must keep in mind that if you&#39;re making a repayment of a loan over ₹20,000 it should also be through an account payee cheque, draft, or ECS (Electronic Clearing System) Okay There&#39;s a prohibition on taking a loan over ₹20,000 in cash, and you can&#39;t repay a loan over ₹20,000 in cash either Sections 269SS and 269T address this Alright, this provision exists, and there are penalties associated with it, if you engage in such actions, you don&#39;t have to read all that Those details aren&#39;t part of your course So this was just theoretical stuff This is what could lead to a practical problem under 269ST Let&#39;s wrap up today&#39;s class here Thank you so much!

Transcript for:Income Tax: Sections 269ST, 269SS, and 269T

Transcript for:
Income Tax: Sections 269ST, 269SS, and 269T