Quick Answer
Under Section 269ST of the Income-tax Act, 1961, no person may receive Rs 2,00,000 or more in cash from a single person (a) in a single day, (b) in a single transaction, or (c) for a single event or occasion. Effective 1 April 2017. The penalty is 100% of the amount received under Section 271DA and falls on the receiver, not the payer. Cheque, NEFT, RTGS, UPI and card receipts are outside 269ST.
Cash limit Rs 2L
Penalty 100%
Liable Receiver
Digital receipts Nil
The three limbs
What Section 269ST Actually Bars
A cash receipt is caught if it crosses Rs 2 lakh on any one of three independent tests. You do not need all three — breaching a single limb triggers the penalty.
- Single transaction — one cash receipt of Rs 2L or more from one person.
- Daily aggregate — total cash of Rs 2L or more from the same person in one day, even across several receipts.
- Single event / occasion — total cash of Rs 2L or more from one person for one event (e.g. a wedding, a property deal), even if spread over several days.
Scenario map
Covered vs Not Covered
| Scenario | Covered by 269ST? | Consequence |
|---|---|---|
| Consultant receives Rs 3L cash from one client for services | Yes | 100% penalty = Rs 3L |
| Rs 1.2L morning + Rs 1L evening from same person (Rs 2.2L) | Yes — daily aggregate | Penalty on Rs 2.2L |
| Property seller receives Rs 10L cash from one buyer in a day | Yes | Penalty = Rs 10L on seller |
| Caterer receives Rs 4L cash for one wedding | Yes — single occasion | Penalty = Rs 4L |
| Rs 1.9L cash from each of 3 different persons | No | Per-person limit — each under Rs 2L |
| Rs 5L received by cheque / NEFT / RTGS / UPI | No | Only cash is covered |
The Rs 2 lakh cash limit is unchanged for FY 2025-26 / AY 2026-27 and carries into the Income-tax Act, 2025 (in force from 1 April 2026).
Section 271DA
The Penalty — 100% on the Receiver
A person who receives cash in breach of Section 269ST is liable to a penalty equal to the amount received under Section 271DA. The penalty is levied by the Joint Commissioner. No penalty applies if the receiver proves there were good and sufficient reasons for the contravention.
The payer is not off the hook either
269ST penalises the receiver. But if the payer is a business, the same cash payment above Rs 10,000 to one person in a day is disallowed as a deduction under Section 40A(3). So one cash deal can hit both sides — the receiver pays a 100% penalty and the payer loses the expense deduction.
Property seller takes Rs 8L cash
Cash received in one dayRs 8,00,000
Limit under 269STRs 2,00,000
BreachYes
Penalty u/s 271DARs 8,00,000
Same deal paid by RTGS
Amount receivedRs 8,00,000
ModeRTGS / cheque
Cash elementNil
Penalty u/s 271DARs 0
Received a notice for a large cash receipt, or unsure if a deal breaches 269ST?
Talk to a Tax Expert →Carve-outs
Who and What is Exempt
Section 269ST does not apply to receipts by government, banking and specified channels, or to transactions already governed by the loan/deposit provisions.
- Receipts by Government, any banking company, post office savings bank or co-operative bank.
- Transactions already covered by Section 269SS (cash loans/deposits above Rs 20,000) — governed there, not under 269ST.
- Persons and receipts notified under Rule 6ABBA / by the Board — e.g. certain business correspondents, white-label ATM operators and prescribed cash-management agents.
- Withdrawals from your own bank / post-office account are not "receipts from a person" and are outside 269ST.
Weddings, gifts and hospitals — read carefully
There is no blanket exemption for wedding gifts or hospital fees. Cash of Rs 2L or more from a single person in a day is caught even if it is a gift. Plan large family or medical cash flows through banking channels to stay clear of 269ST.
Compare
Section 269ST vs Section 40A(3)
40A(3)
Hits the payer
- Business cash payment above Rs 10,000 to one person in a day
- Consequence: the expense is disallowed as a deduction
- Indirect cost — you lose the tax benefit of the spend
vs
269ST
Hits the receiver
- Any person receiving Rs 2L or more cash from one person/day/event
- Consequence: 100% penalty under Section 271DA
- Direct penalty equal to the full amount received
Both provisions can apply to the same transaction at once — the payer loses the deduction and the receiver pays the penalty. See our detailed guide on Section 40A(3).
Government sourcesSection 269ST: incometaxindia.gov.in · Penalty: Section 271DA · Introduced by the Finance Act, 2017 (eff. 1 April 2017) · Exemptions: Rule 6ABBA, Income-tax Rules, 1962
People also ask
Section 269ST — Frequently Asked Questions
Basics
What is Section 269ST of the Income Tax Act?
Section 269ST, introduced by the Finance Act 2017 with effect from 1 April 2017, prohibits any person from receiving Rs 2,00,000 or more in cash from a single person (a) in a single day, (b) in respect of a single transaction, or (c) in respect of transactions relating to one event or occasion. Its aim is to curb large unaccounted cash dealings. The penalty for breaching it is a sum equal to the amount received, under Section 271DA.
What is the cash transaction limit under 269ST?
Rs 2,00,000. You cannot receive Rs 2 lakh or more in cash from one person in a single day, in a single transaction, or for a single event. Receipts up to Rs 1,99,999 in cash are outside 269ST (though other cash rules like Section 269SS on loans may still apply).
Is Section 269ST still applicable for FY 2025-26?
Yes. The Rs 2 lakh cash receipt limit under Section 269ST continues unchanged for FY 2025-26 (AY 2026-27) and was not altered by Union Budget 2025. The same rule carries into the new Income-tax Act, 2025, which is in force from 1 April 2026 — only the section number is renumbered; the Rs 2 lakh limit and the 100% penalty stay the same.
Coverage
Does 269ST apply to a single transaction or the daily total?
Both, independently. A single cash receipt of Rs 2L or more from one person is caught. So is the aggregate of several receipts from the same person in one day if they total Rs 2L or more. A third limb covers all cash for one event or occasion even if spread over several days. Breaching any one limb triggers the penalty.
If I receive Rs 1.9 lakh cash from three different people, is it a violation?
No. The Rs 2 lakh limit is tested per person. Rs 1.9L from each of three different persons is Rs 1.9L per person — each is below Rs 2L, so 269ST is not breached. The limbs aggregate only receipts from the same person (in a day) or for the same event.
Does 269ST apply to property sale transactions?
Yes, on the receiving side. A property seller who accepts Rs 2L or more in cash from one buyer (in a day, in one transaction, or for the single property deal) breaches 269ST and faces a 100% penalty. The buyer does not breach 269ST for paying, but if the buyer is a business the payment may be disallowed under Section 40A(3). Always route property consideration through cheque, RTGS or NEFT.
Are cheque, NEFT, RTGS and UPI receipts covered by 269ST?
No. Section 269ST restricts cash (and bearer-cheque-type) receipts only. Payments received by account-payee cheque, account-payee bank draft, or electronic clearing through a bank account — NEFT, RTGS, IMPS, UPI, card — are fully outside 269ST, whatever the amount.
Does 269ST apply to cash gifts received at a wedding?
There is no blanket exemption. If a person receives Rs 2 lakh or more in cash from a single person in a single day — including as a wedding gift — it falls within 269ST and the 100% penalty can apply to the receiver. Gift-tax exemptions (for gifts from relatives or on marriage) address taxability of the gift, not the cash-mode restriction of 269ST. Keep large gifts in banking channels.
Penalty
What is the penalty for violating Section 269ST?
Under Section 271DA, the penalty is a sum equal to the amount received in contravention — effectively 100% of the cash received above the limit. It is levied by the Joint Commissioner and falls on the receiver. No penalty is imposed if the receiver proves there were good and sufficient reasons for the contravention.
Who pays the penalty under 269ST — the payer or the receiver?
The receiver. Section 269ST and its penalty (271DA) target the person who accepts the cash. The payer is not penalised under 269ST, but a business payer may lose the deduction under Section 40A(3) for cash payments above Rs 10,000 to one person in a day. So a single cash deal can penalise the receiver and cost the payer a deduction.
Can the 269ST penalty be waived?
Yes, in principle. Section 271DA provides that no penalty is imposable if the person proves there were good and sufficient reasons for the contravention. This is fact-specific — the receiver must demonstrate a genuine, bona-fide reason before the Joint Commissioner. It is not automatic; keep documentation and, ideally, take professional help before responding to any notice.
Exemptions
What is exempt from Section 269ST?
269ST does not apply to receipts by the Government, any banking company, post office savings bank or co-operative bank; to transactions already covered by Section 269SS (cash loans/deposits); or to persons and receipts notified under Rule 6ABBA (such as certain business correspondents and white-label ATM operators). Withdrawals from your own bank account are also outside 269ST because they are not receipts from another person.
Related
What is the difference between Section 269ST and Section 40A(3)?
Section 40A(3) targets the payer: a business that pays more than Rs 10,000 in cash to one person in a day for an expense loses that deduction. Section 269ST targets the receiver: any person receiving Rs 2L or more in cash from one person (day/transaction/event) pays a 100% penalty under 271DA. 40A(3) discourages paying in cash by removing the deduction; 269ST discourages receiving cash by imposing a penalty. Both can apply to the same transaction.
How is Section 269ST different from Section 269SS?
Section 269SS governs cash loans and deposits — you cannot accept a loan or deposit of Rs 20,000 or more otherwise than through banking channels (penalty under 271D). Section 269ST is broader and governs all other cash receipts of Rs 2L or more (penalty under 271DA). Transactions already covered by 269SS are specifically excluded from 269ST, so the two do not overlap on the same receipt.
Does 269ST apply under the new Income-tax Act, 2025?
Yes. The cash-receipt restriction is carried forward into the Income-tax Act, 2025 (effective 1 April 2026) with the same Rs 2 lakh threshold and the same 100% penalty. The clause number is renumbered under the new Act, but for search and reference the provision is still widely known as Section 269ST. Verify the exact new clause number against the notified Act before citing it in filings.
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