Moving ahead with digital India, The Government with a view to curb black money sets various limits on cash transactions from time to time. There are serious penalties on breaching those limits, so lets understand what are these limits and what could be the consequence on breaching them.

Cash transactions have traditionally played a significant part in the Indian economy and have be the cause of the accumulation of black money. Slowly and steadily Indian have been moving toward the digital transaction and to discourage the cash transaction, black money and corruption, The government has set various limits on cash transactions. Paying or receiving cash in excess of these limits is punishable by a steep penalty which may extend to 100% of the amount paid or received.

Let’s see what are those cash transactions that may bring some serious penalties:

1. cash transactions in excess of ₹ 2 lakh for any reason. Whether you buy some Jewelry or electronics for any transaction above 2 lakhs You must make payment through modes other than cash like via cheque, credit card, debit card, or bank transfer. Even if you receive money from any family members or relatives as loan or you received cash gift of more than 2 lakhs , you must follow this guideline, any violation of these may face a penalty equivalent to the amount received.
2. In a property transaction, the maximum cash allowed is also ₹ 20,000. The limit remains the same even if a seller accepts an advance.
3. You can not claim any expenditure over ₹ 10,000 if its paid in cash to a single person in a single day. (except in cash of payments made to a transporter the threshold is ₹ 35,000.
4. Any loan repayments in cash should not exceed ₹ 20,000. The repayment must be made though modes other than cash like via cheque, credit card, debit card, or bank transfer.
5. Health Insurance premium under Section 80D must not be paid in Cash, If premium is paid in Cash, you are not eligible for deduction.