If you still use cash ie cash to borrow or take, then you need to be a little cautious. The Income Tax Department has made it clear that if someone takes or given a cash of more than 20 thousand rupees, then a case of breaking the law can be made and the amount you have given in the cash if you are caught will be fined.
Cash borrowing wrong
If you borrowed or given more than Rs 20,000 in cash from a friend, relative or acquaintance, then it is against the law. According to income tax rules, more than Rs 20,000 can not be transacted in cash, whether it is borrowing or for some other reason.
If you do this, the Income Tax Department can take it seriously. For this, Section 269SS of the Income Tax Act is applied, and under this you can be imposed under Section 271D as much as the amount of cash is charged or given to you. Meaning if you borrowed Rs 25,000 in cash, then a fine of Rs 25,000 may also have to be paid.
Cash transaction is required
The Supreme Court has also become strict about this. In April 2025, the court clearly said that if someone transactions in more than two lakh cash, the Income Tax Department will investigate it. The court also said that the one who has given money in cash, will also have to tell where the money came from him. The government believes that due to transaction in more cash, cases of black money and tax evasion increase, so now it is necessary to stop it.
When are these rules not applied?
Now you can wonder whether these rules apply to everyone? The answer is not. If the transaction is being done by a bank, government institution or any department of the government, then these rules do not apply. Apart from this, even if both people are associated with farming and their earnings do not come under tax, then these rules do not apply.
What to do so that there is no problem?
If you are borrowing someone or giving money to someone, and the amount is more than 20 thousand rupees, then try that everything is through the bank. In today’s time, online transactions have become very easy. In such a situation, avoid transacting a large amount in cash by mistake. Otherwise, a notice can come from the Income Tax Department later and the equal fine of the amount can also be taken.