If you are thinking of buying or selling a property, then you should know the rules related to money transactions. Today we are going to tell you to what extent you can deal in property in cash.
If you are thinking of buying or selling a property then this news is important for you. Before making a property deal, you should know the rules related to money transactions, otherwise you may have to repent later.
Many times, transactions in cash are offered for the purchase and sale of property and the opposite party also accepts it, but let us tell you that you can transact in cash only to a limited extent.
Today we are going to tell you to what extent you can deal in property in cash and what problems you may have to face if you violate this rule.
What is the cash transaction limit?
In the year 2015, the government made some changes in sections 269SS, 269T, 271D and 271E of the Income Tax Act, after which you can do cash transactions only up to Rs 19,999. If you do not follow this rule, you may receive a notice from the Income Tax Department.
For example, suppose you sold some of your land for Rs 1 lakh for which you took payment in cash. After this, under Section 269SS of Income Tax, all this money i.e. 100 percent will go to Income Tax as penalty.
Fine may be imposed again under section 269T
Under Section 269T of Income Tax, if your deal is canceled and the opposite party asks you to return the payment in cash, then even in such a situation you will be able to return the payment in cash only up to Rs 20 thousand. If you return more than this amount in cash, you will have to pay penalty again under Section 269SS.
How will the Income Tax Department get the news?
The right question that is running in your mind is that if the transaction is taking place in cash then how will the Income Tax ultimately know about it. The answer is registry. When you buy property in the country, you have to get it registered, only after which the property becomes legally yours.
In such a situation, when you get your property registered, the complete details of your cash transactions will be known to the Income Tax Department, after which action can be taken against you.
How to do transaction?
For transactions above Rs 19,999, you can use check or internet banking. It is important to note here that this rule of income tax does not apply to some selected individuals and institutions run by the government, government company, banking company or the central government.