{"id":14455,"date":"2026-05-27T07:43:08","date_gmt":"2026-05-27T07:43:08","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/glossary\/section-269st\/"},"modified":"2026-05-27T07:43:08","modified_gmt":"2026-05-27T07:43:08","slug":"section-269st","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/section-269st\/","title":{"rendered":"Section 269ST"},"content":{"rendered":"

Section 269ST<\/a> of the Income Tax Act<\/a>, 1961 prohibits any person from receiving cash of Rs 2 lakh or more from a single person in a day, from a single transaction, or from transactions relating to a single event or occasion. It was introduced in the 2017 Union Budget to curb black money and encourage digital payments.<\/p>\n

What Is Section 269ST?<\/h2>\n

Section 269ST puts a ceiling on cash receipts. The restriction applies when:
\n– A single person pays Rs 2 lakh or more in cash in a single day
\n– A single transaction involves Rs 2 lakh or more in cash
\n– Multiple transactions from one person related to a single event or occasion total Rs 2 lakh or more in cash<\/p>\n

The restriction is on the RECIPIENT: the person receiving cash is liable for the penalty, not the payer.<\/p>\n

Who Does Section 269ST Apply To?<\/h2>\n

The restriction applies to all persons except:
\n– Government offices
\n– Banking companies, post offices, and cooperative societies engaged in banking
\n– Transactions specifically exempted under Rule 6ABBA (such as loans from scheduled banks or transactions involving death, accident, or severe illness)<\/p>\n

Penalty for Violation<\/h2>\n

Section 271DA imposes a penalty equal to the amount received in violation. For example, if a business receives Rs 5 lakh in cash in one day from one person, the penalty is Rs 5 lakh (100% of the cash received).<\/p>\n

Practical Examples of Section 269ST<\/h2>\n

**Prohibited:**
\n– A jeweller receives Rs 3 lakh cash from a customer for a single purchase
\n– A real estate agent receives Rs 2.5 lakh cash on a single day from one client for multiple services
\n– A contractor receives Rs 2 lakh or more in cash against a single contract<\/p>\n

**Allowed:**
\n– Multiple payments of Rs 1.5 lakh each on different days from the same person for different transactions
\n– Cash withdrawals from banks are not covered
\n– Receipt of agricultural income<\/a> (with certain conditions)<\/p>\n

Practical Example<\/h2>\n

Ramesh runs a furniture shop. A customer wants to buy furniture for Rs 3 lakh and offers to pay in cash. Ramesh cannot accept this cash payment under Section 269ST. He must insist on a cheque, bank transfer, or digital payment. If he accepts the cash, he faces a Rs 3 lakh penalty.<\/p>\n

Key Takeaways<\/h2>\n

– Section 269ST prohibits receiving Rs 2 lakh or more in cash from a single person in a day or a single transaction
\n– The penalty under Section 271DA is 100% of the cash amount received
\n– The restriction applies to the recipient; government bodies and banks are exempt
\n– Businesses must maintain records and ensure large transactions are through banking channels
\n– Section 269ST works in tandem with Section 40A(3) (disallowing cash payments above Rs 10,000 as business expense<\/a>) to push India toward a less-cash economy<\/p>\n","protected":false},"excerpt":{"rendered":"

Section 269ST of the Income Tax<\/a> Act, 1961 prohibits any person from receiving cash of Rs 2 lakh or more from a single person in a day, from a single transaction, or from transactions relating to a single event or occasion. It was introduced in the 2017 Union Budget to curb black money and encourage […]<\/p>\n","protected":false},"author":3,"featured_media":0,"menu_order":0,"template":"","meta":{"_uag_custom_page_level_css":"","footnotes":""},"class_list":["post-14455","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"web-stories-poster-portrait":false,"web-stories-publisher-logo":false,"web-stories-thumbnail":false},"uagb_author_info":{"display_name":"Team Lemonn","author_link":"https:\/\/lemonn.co.in\/blog\/author\/ashu\/"},"uagb_comment_info":0,"uagb_excerpt":"Section 269ST of the Income Tax Act, 1961 prohibits any person from receiving cash of Rs 2 lakh or more from a single person in a day, from a single transaction, or from transactions relating to a single event or occasion. It was introduced in the 2017 Union Budget to curb black money and encourage…","_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/14455","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"version-history":[{"count":0,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/14455\/revisions"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=14455"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}