{"id":30304,"date":"2021-05-14T14:20:43","date_gmt":"2021-05-14T08:50:43","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=30304"},"modified":"2021-05-14T14:20:49","modified_gmt":"2021-05-14T08:50:49","slug":"section-269st-of-it-act-1961","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/section-269st-of-it-act-1961\/","title":{"rendered":"Section 269ST of IT Act 1961: Explained with Examples"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Black money in our nation&nbsp;is circulated\ncontinuously. It can affect the fiscal resilience and eventually jeopardize the\nwhole economy. In India, the circulation of black money is massive, which\nnegatively impact the Government\u2019s revenue, thereby creating a resource crunch\nfor its multiple welfare programmes.<\/p>\n\n\n\n<p>Black money is usually circulated and used in\nthe form of cash. To curb the circulation of such funds, the Government\nintroduced the section 269ST of the Income Tax Act 1961<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/section-269st-of-it-act-1961\/#What_is_Section_269ST_of_IT_Act_1961\" >What\nis Section 269ST of IT Act 1961?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/section-269st-of-it-act-1961\/#Non-applicability_of_Section_269ST\" >Non-applicability of Section 269ST<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/section-269st-of-it-act-1961\/#Penalty_Regarding_Non-Conformity_With_Provisions_of_Section_269ST\" >Penalty\nRegarding Non-Conformity With Provisions of Section 269ST<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/section-269st-of-it-act-1961\/#Important_Points_That_Worth_Your_Attention\" >Important\nPoints That Worth Your Attention&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/section-269st-of-it-act-1961\/#Understanding_concept_of_section_269T_via_Examples\" >Understanding\nconcept of section 269T via Examples<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/section-269st-of-it-act-1961\/#Conclusion\" >Conclusion&nbsp;<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Section_269ST_of_IT_Act_1961\"><\/span>What\nis Section 269ST of IT Act 1961?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As per the Section 269ST, the individual can\nonly receive a sum of Rs 2, 00,000 or more via account payee bank draft or\naccount payee cheque or electronic clearing system or through other prescribed\nelectronic mode (w.e.f. 1.9.2019):-<\/p>\n\n\n\n<ul><li>In\ntotal from an individual in a day; or<\/li><li>In\nrelation to a single transaction; or<\/li><li>In\nrespect of transactions regarding one event or occasion from a person.<\/li><\/ul>\n\n\n\n<div class=\"shadow1\"><strong>Note:<\/strong> The Central Board of Direct Taxes, through its circular no. 22\/2017, has clarified that with reference to a receipt regarding loan repayment by NBFCs and HFCs, the receipt of one loan instalment shall constitute a \u2018single transaction\u2019 as cited in clause (b) of section 269ST &amp; all the repayment done for a loan shall not be totalled by considering section 269ST.<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Non-applicability_of_Section_269ST\"><\/span>Non-applicability of Section 269ST<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/05\/Non-applicability-of-Section-269ST-1.png\" alt=\"Non-applicability of Section 269ST\" class=\"wp-image-30379\" width=\"532\" height=\"533\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/05\/Non-applicability-of-Section-269ST-1.png 997w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/05\/Non-applicability-of-Section-269ST-1-150x150.png 150w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/05\/Non-applicability-of-Section-269ST-1-300x300.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/05\/Non-applicability-of-Section-269ST-1-768x770.png 768w\" sizes=\"(max-width: 532px) 100vw, 532px\" \/><\/figure><\/div>\n\n\n\n<ul><li>Any receipt by any banking company, Government, co-operative bank or post office savings bank.&nbsp;<\/li><li>Transactions of nature cited in section 269SS.<\/li><li>Such other individuals or class of persons, notified by the Central Government.<\/li><\/ul>\n\n\n\n<p>Accordingly, vide Notification No. 57\/2017, dated 3-7- 2017 &amp;\nNotification No. 28\/2017 dated 5-4-2017, the Central Government clarified that\nthe provision under section 269ST shall not cover the following, viz:-<\/p>\n\n\n\n<ol><li>&nbsp;receipt (cash withdrawals) by any individual from a bank or a post office savings bank;<\/li><li>receipt by a business communication on behalf of a co-operative bank or a banking company, with reference to guidelines provided by the <em><strong>RBI<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Reserve_Bank_of_India\"><em><strong>[1]<\/strong><\/em><\/a><\/sup>;&nbsp;<\/li><li>receipt by a white label electronic teller machine from retail outlet on behalf of a bank, with reference to guidelines provided by the RBI under the Payment &amp; Settlement Systems Act, 2007;<\/li><li>receipt from an agent by a pre-paid payment instruments\u2019 issuers, with reference to guidelines provided by the RBI under the Payment &amp; Settlement Systems Act, 2007;<\/li><li>receipt by an institution or company issuing credit cards for bills raised relating to one or more credit cards;<\/li><li>the receipt, which falls outside the ambit of section 10(17A).<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Penalty_Regarding_Non-Conformity_With_Provisions_of_Section_269ST\"><\/span>Penalty\nRegarding Non-Conformity With Provisions of Section 269ST<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Suppose an individual receives any amount in violation of the provision under section 269ST of Income Tax Act 1961. In that case, he\/she shall be accountable to pay a penalty of a sum equivalent to the amount of such receipt. But, no penalty will be levied if such an individual proves that there were viable grounds for contravention.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/income-tax-return-e-filing\/\">Income Tax return e-filing: Things you must know <\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Important_Points_That_Worth_Your_Attention\"><\/span>Important\nPoints That Worth Your Attention&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Circular No. 27\/2017, dated\n3-11-2017:-Applicability of income-tax provisions u\/s 269ST to cash sale of\nagriculture-based produce by agriculturists\/ cultivators to traders<\/p>\n\n\n\n<ul><li>Section\n269ST of Income Tax Act 1961 revolve around certain exceptions, forbids the\nreceipt of Rs, 2, 00,000 or more, otherwise than by an account payee draft\/\ncheque or by way of digital clearing system via a bank account from an\nindividual in a day with reference to a single transaction or in respect of\ntransactions relating to an event from an individual.&nbsp;Thus, any cash sale\nof a sum of Rs. 2, 00,000 or more by an agriculturist of agricultural produce\nis forbidden under section 269ST.<\/li><li>CBDT\nhas already clarified that the cash sale of the agriculture-based produce by\nits cultivator to the trader for a sum less than Rs. 2 00,000 will not lure\nprohibition u\/s 269ST in the case of the cultivator.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Understanding_concept_of_section_269T_via_Examples\"><\/span>Understanding\nconcept of section 269T via Examples<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em><strong>The section below encloses some practical examples that will boost your understanding regarding the Section 269T of the IT Act. <\/strong><\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Example\nNo.1<\/h3>\n\n\n\n<p>Mr Rakesh buys a sports bike worth Rs 2 00,000\n&amp; pays a sum by cash to Mr Rahul on a single day in 4 instalments of Rs\n50,000. As Mr Rahul accepted cash of sum Rs 2 00,000 from a single person in a\nday, section 269ST come into effect in such scenario, and Mr Rahul must pay the\npenalty equivalent to the transaction amount, i.e. Rs 2, 00,000.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Example\nNo.2<\/h3>\n\n\n\n<p>Mr Kamlesh goes through medical treatment, and\nthe hospital charges a bill of Rs. 4,00,000. Mr Kamlesh makes the full\nrepayment in 4 equal instalments on different dates. Here the hospital is\nliable to address the penalty because the splitting of payment over different\ndates is prohibited under Section 269ST.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Example\nNo. 3<\/h3>\n\n\n\n<p>Mr Pankaj receives a loan worth Rs 18000 on 01\/Oct\/2020\n&amp; by account payee cheque on 20\/Nov\/2020 of Rs 22000. Mr Pankaj makes the\nfull repayment on 20\/Nov\/2020 by Rs 15000 in cash &amp; Rs 25000 via account\npayee cheque.<\/p>\n\n\n\n<p>In this scenario, the total sum of the loan has\nsurpassed the limit of Rs 20,000. Mr Pankaj received the 2nd loan via account\npayee cheque. Therefore, there is no contravention of section-269SS. The total\namount outstanding of Rs 40,000 as of 04\/Oct\/2020. Mr Pankaj has repaid the\nabove amount in cash amounting to Rs 15000 on 20\/Nov\/2020 &amp; has breached\nthe provisions of section 269T as the total amount due was more than Rs\n20000.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Section 269ST is all about curbing the movement\nof illegal funds, widely known as black money. Such funds are the biggest\ndisruption to the economy and national security. The combination of power\n&amp;money gives birth to black money. <\/p>\n\n\n\n<p>The origination of such money disrupts the balance of commerce, trade, &amp; industry of the nation. The influence of black money can trigger the unfair accumulation of essential commodities and endangers healthy competition.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/potential-consequences-of-not-filing-the-income-tax-return\/\">Potential Consequences of Not Filing The Income Tax Return <\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Black money in our nation&nbsp;is circulated continuously. It can affect the fiscal resilience and eventually jeopardize the whole economy. In India, the circulation of black money is massive, which negatively impact the Government\u2019s revenue, thereby creating a resource crunch for its multiple welfare programmes. Black money is usually circulated and used in the form of [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":30381,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[10],"tags":[1739],"acf":{"service_id":"403"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":10162,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/30304"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=30304"}],"version-history":[{"count":20,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/30304\/revisions"}],"predecessor-version":[{"id":30385,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/30304\/revisions\/30385"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/30381"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=30304"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=30304"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=30304"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}