Why you must keep away from money in these transactions
MUMBAI: Recently, the revenue tax division relaxed money norms for covid-19 therapy. It issued a notification permitting sufferers, their households and associates to pay ₹2 lakh or extra in money at hospitals between 1 April and 30 May. The hospital ought to take a replica of the Aadhaar and PAN particulars of the affected person and the individual giving the cash. They must state their relationship.
There is a blanket ban on money fee transactions above ₹2 lakh. For instance, in case you are shopping for a jewelry set of ₹3 lakh, because the buy value is above the permissible restrict, the individual can not pay in money for this transaction.
An particular person can not even settle for money from shut relative above this restrict in a single day. Some transactions are out of this purview. For instance, you run a enterprise and wish to deposit over ₹2 lakh within the checking account which you’ve got obtained in a number of transactions throughout the course of enterprise.
LIMITS ON LOANS AND PROPERTY
If somebody is taking a mortgage from a monetary establishment and even from a good friend, the money restrict can’t be greater than ₹20,000. The similar rule applies to compensation of the mortgage. For mortgage compensation of ₹20,000, the individual should pay via the banking channel.
The most money permitted in a property transaction, too, is ₹20,000. Even if a vendor is taking an advance, the restrict is similar.
BUSINESS EXPENDITURE
Businesses are additionally discouraged from accepting or paying in money. If a enterprise proprietor transacts for greater than ₹10,000 in money, he can not declare it as an expenditure or declare depreciation.
TAX-SAVING INSTRUMENTS
When doing all of your tax planning, be certain that you don’t pay for medical health insurance in money. The regulation doesn’t permit the taxpayer to take good thing about Section 80D if he pays the insurance coverage premium in money. It must be executed mandatorily via the banking channel.
In most circumstances, the onus is on the receiver to not settle for money. Typically, the revenue tax division levies the penalty on the receiver, equal to the quantity concerned. It’s logical because the individual giving the money can all the time deny it.
It’s not allowed even should you obtain the cash in money and instantly deposit it within the checking account.
(Do you’ve got private finance queries? Send them to [email protected] and get them answered by trade specialists)
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