Question
What are the cash transaction limits under Sections 269ST and 40A(3)?
Answer
Bottom line: You cannot receive ₹2,00,000 or more in cash from one person in a day, and business cash expenses above ₹10,000 are disallowed.
1. Section 269ST
Receiving ₹2,00,000 or more in cash from a person in a day, or for a single transaction or event, attracts a penalty equal to the amount, on the receiver.
2. Section 40A(3)
A business expense paid in cash above ₹10,000 to a person in a day is disallowed (₹35,000 for goods-carriage transporters).
3. Stay safe
Use banking channels to keep the deduction and avoid penalties.
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This answer is general information based on the law as it stood when written and is not professional advice on your specific situation. Verify the current position and consult a qualified professional before acting. See our disclaimer.