CBDT cuts per day cash limit for payments

Mangalore Today News Network / Yahoo

New Delhi,  Feb 04, 2020:   The Central Board of Direct Taxes (CBDT) has amended the Income-tax Rules, 1962, to reduce the cash payment limit for payments made to a person in a day.

The income tax rule 6DD which deals with cases and circumstances in which a payment or aggregate of payments exceeding Rs 20,000 may be made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, has been amended. The maximum amount for such cases under income tax rule 6DD stands at Rs 10,000 now.

The amended Income Tax rule 6DD says – “Cases and circumstances in which a payment or aggregate of payments exceeding Rs 10,000 may be made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as prescribed in rule 6ABBA.”;

The rule 6ABBA is deemed to have been inserted from the 1st day of September 2019, which mentions all digital or electronic mode of payments includes

(a) Credit Card
(b) Debit Card
(c) Net Banking
(d) IMPS (Immediate Payment Service)
(e) UPI (Unified Payment Interface)
(f) RTGS (Real Time Gross Settlement)
(g) NEFT (National Electronic Funds Transfer), and
(h) BHIM (Bharat Interface for Money) Aadhaar Pay”

Central Board of Direct Taxes has made the rules to amend the Income-tax Rules, 1962, and the new rules may be called the Income-tax (3rd Amendment) Rules, 2020. In simple terms, payments other than through any electronic means i.e. in cash is restricted to Rs 10,000 per day, where ever it is applicable.