Goods and Services Tax (GST) and Income Tax are two of the most important taxes that Indian businesses have to deal with. Both these taxes have certain rules and regulations that businesses need to follow in order to remain compliant with the law. One such rule is the cash transaction limit under GST and Income Tax.
Under the GST law, any person who is registered under the GST must maintain a record of all the transactions that they carry out. This includes all transactions that are done through cash. However, under the GST law, there is a limit on the amount of cash that can be transacted in a single day. This limit is currently set at Rs. 10,000.
This means that any transaction that is carried out through cash and exceeds Rs. 10,000 in a single day must be done through electronic modes of payment such as credit/debit cards or bank transfers. This rule is applicable to all registered entities, including small and medium-sized businesses and startups.
Under the Income Tax Act, there are certain rules and regulations that businesses must follow when it comes to cash transactions. One of the most important rules is the limit on cash transactions.
According to the Income Tax Act, any person who receives cash exceeding Rs. 2 lakh in a single day must report this transaction to the Income Tax Department. This rule is applicable to all businesses, including small and medium-sized enterprises and startups.
It is important to note that this rule applies to all cash transactions, including those that are done through banks. So, if a business receives cash deposits exceeding Rs. 2 lakh in a single day, they are required to report this to the Income Tax Department.
The government has imposed limits on cash transactions in order to reduce the use of black money in the economy. Black money is money that is earned through illegal means and is not reported to the authorities. By imposing limits on cash transactions, the government is able to track the flow of money in the economy and reduce the amount of black money that is in circulation.
If a business does not follow the cash transaction limits, they can face severe consequences. Under the GST law, any entity that fails to comply with the cash transaction limits can be penalized with a monetary fine. The penalty can range from 100% to 200% of the amount of tax that was evaded.
Similarly, under the Income Tax Act, businesses that fail to report cash transactions exceeding Rs. 2 lakh can be penalized with a monetary fine. The fine can range from 100% to 300% of the amount of tax that was evaded.
The cash transaction limits under GST and Income Tax are an important aspect of doing business in India. Businesses must ensure that they comply with these limits in order to avoid penalties and fines. By doing so, they can also contribute to the government's efforts to reduce the use of black money in the economy.
How to Change of E-Mail ID Mobile No. in GST in Case of Proprietorship
Woven Fabrics Of Synthetic Staple Fibre Mixed Cotton
Input Tax Credit: A Detail Study
