Here Are The Rule Changes For Cash Deposits Of More Than 20 Lakh in a Year.

The government had modified cash limit restrictions earlier in the year in an effort to clamp down on illegal and unaccounted cash transactions. Paying or receiving cash above the stated cutoff points is punishable by up to 100 percent of the amount paid or received.

According to the new standards and guidelines established by the Central Board of Direct Taxes (CBDT), persons wishing to keep more than 20 lakh per year will now be required to present their PAN details as well as their Aadhaar card.

While there was formerly a limit of 50,000 people expected to outfit PAN subtleties while saving money, the Income Tax division has imposed no yearly line.

However, under the new rules, cash withdrawals and deposits of large sums of money across several institutions in a single year must be accompanied by PAN and Aadhaar subtleties to identify identifiable complexities.

rule changes in cash deposit

“Each individual will, at the time of entering an exchange determined in segment (2) of the Table beneath, quote his extremely durable record number or Aadhaar number, generally, in reports relating to such exchange, and each individual determined in section (3) of the said Table, who gets such archive, will guarantee that the said number has been properly cited and validated,” the CBDT said in a May 10 notification.

Read More: 24 different investments and expenditures you can claim in 80C up to 1.5 Lakh while filing your tax returns

In recent years, the Income Tax division, along with other Central government departments, has been updating and revising guidelines to reduce the risk of monetary extortion, illicit cash exchanges, and other cash wrongdoings.

To limit the use of money in high-value transactions, the government also prohibits receiving cash worth more than 2 lakh. In this manner, an individual cannot accept more than 2 lakh in real money, even from close family members.

rule changes for cash deposit
To combat dark money, the government has established distinct lines on cash trades. We should look into several money exchanges that could have major consequences:
  • In India, cash exchanges above 2 lakh rupees are prohibited under any circumstances. For example, if you buy gold jewels valued 3 lakh in a single transaction, you should pay by cheque, Mastercard, charge card, or bank transfer.
  • You must follow this regulation regardless of whether you get money from a relative.
  • To limit cash usage in high-value transactions, the government prohibits anyone from tolerating currency worth more than Rs. 2 lakh. Thus, even from direct relationships, an individual cannot accept more than 2 lakh in real money in a single day.
  • Even a monetary incentive of more than 2 lakh from a single benefactor on a single occasion cannot be accepted. Individuals who accept cash in excess of Rs. 2 lakh in violation of this regulation may face a fine equal to the amount received.
  • While charge planning, be certain that you do not pay for health insurance in actual money. Citizens who pay their insurance premiums in cash are not eligible for the Section 80D deduction. It is necessary to complete the process through the financial system.
  • If a person obtains a loan from a financial institution or a friend, the total amount cannot exceed 20,000. A same rule applies to obligation repayment. The repayment of a 20,000 loan should be done through a monetary channel.
  • The greatest extreme amount of money permissible in a property exchange is also 20,000. The cutoff remains unchanged regardless of whether a dealer acknowledges a change.
  • They can’t guarantee any use exceeding 10,000 if it’s paid in real money to a single individual in a single day for independently working citizens. The law establishes a greater ceiling of 35,000 for payments made to a carrier.