- If you accept the cash amount > 2 lacs, a penalty of the equal amount is attracted
- This is applicable in case of an aggregate transaction in a day, a single transaction from a person, transactions relating to a single event or an occasion.
- However, the hospitals, nursing homes, dispensaries and care centers giving treatment and care for covid patients are exempted
- Such exemption is applicable for payments received from 01/04/2021 to 30/05/2021.
- But these hospitals and facilities need to obtain PAN or Aadhar of the patient and the payer of cash. The payer’s relationship with patient also should be obtained.
As per section 269ST of the Income-tax Act, any person is barred from accepting a cash amount exceeding ₹ 2 lacs against any kind of transaction. Such bar is applicable to an aggregate transaction in a day, a single transaction from a person, transactions relating to a single event or an occasion. A violation of this provision attracts a penalty of the amount equal to the cash amount received. However, this provision does not apply to Government, any banking company, post office savings bank, co-operative bank, or any other person as notified by the Central Government.
Using the last exception as above, the Central Government has issued a notification on 07/05/2021, exempting covid treatment facilities as above for accepting cash payments of more than ₹2 lacs. The hospitals, dispensaries, nursing homes, covid care centers now can accept cash payments above ₹2 lacs for a period of 01/04/2021 to 31/005/2021. So, in case any of these entities receive the notice of penalty in the future, they may take benefit of this notification.
