Cash payments over ₹2 lakh need to be reported | Fusion - WeRIndia

Cash payments over ₹2 lakh need to be reported

Cash payments over ₹2 lakh need to be reported

There has been much speculation about the need for reporting cash payments over ₹2 lakh for sale of goods or services.

However, on December 23rd, the government clarified the matter.

It was announced that this rule only applies to single transactions which cross the ₹2 lakh mark.

Reporting is not needed for aggregate transactions.

In order to solve the confusion, the Central Board of Direct Taxes (CBDT) clearly mentioned when it is needed to report payments.

If a single transaction for sale of goods or services involves a cash payment which crosses the ₹2 lakh, then that transaction needs to be reported.

This was stated in a release by Union Finance Ministry.

The release clearly states that no aggregation is needed.

This rule applies to anyone who is liable for audit under section 44AB of the Income-Tax Act, 1961.

A proper statement regarding the receipt of cash payment crossing ₹2 lakh is mandatory.

The release that due to several doubts by people, this was announced.

CBDT clearly stated that there is no need of aggregation for the reporting under SFT (Statement of Financial Transactions).

There have been other regulations from the government recently. The RBI tried to limit the deposits of old note exceeding ₹5000 till December 31.

However, that decision was met with a lot of criticism which made the RBI revoke it.

After the demonetization, many Indians have adopted to cashless methods of transactions.

From paper delivery services to fruit vendors, many are shifting to cashless methods like cheques.

Some are even using technology to go digital. Apps like Paytm and Freecharge are being used many to transfer money. Many general stores have already Point of Sale machines.

This might just be the beginning of a new era for India with more preference towards digital systems.

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