# Cash Receipt Limit Rs. 2 Lakh — What Is Section 269ST?

**Category:** Tax Guide | **Published:** 2026-05-04 | **Last reviewed:** 2026-06-25 | **Author:** Mrs. Swapna Patel

Section 269ST of the Income Tax Act, 1961 bars any person from receiving cash of ₹2,00,000 or more from a single person, whether in aggregate in a day, in a single transaction, or relating to one event or occasion. The penalty under Section 271DA equals 100% of the amount received, falling on the recipient regardless of intent.

> **Myth:** Section 269ST penalises the person who pays the cash, so as the receiver you are safe.
>
> **Fact:** The opposite. [Section 271DA](https://www.incometaxindia.gov.in/Pages/acts/income-tax-act.aspx) levies the 100% penalty on the person who *receives* Rs. 2 lakh or more in cash, regardless of who handed it over or why.

## What is the Section 269ST cash receipt limit?

> **Short answer:** [Section 269ST](https://www.incometaxindia.gov.in/Pages/acts/income-tax-act.aspx) bars any person from receiving Rs. 2,00,000 or more in cash from a single person. It bites on the receiver, not the payer.

Introduced by the [Finance Act 2017](https://www.indiabudget.gov.in/) in the demonetisation-era cashless push, the cap applies three ways, and breaching any one prong is enough.

- In aggregate from one person in a single day, even across several small cash handovers.
- In a single transaction, whatever the date split.
- Across transactions relating to one event or occasion, such as a wedding or property deal.
- The Rs. 2 lakh test is per receiver per source, so the same person can receive Rs. 1.99 lakh cash from two different people on the same day without breaching it.

**[See the three-prong test as a diagram](https://hrareceipt.in/atlas/section-269st-2-lakh-cash-limit-three-prongs)**

## What is the penalty for breaking Section 269ST?

> **Short answer:** Under [Section 271DA](https://www.incometaxindia.gov.in/Pages/acts/income-tax-act.aspx) the penalty equals 100% of the cash received, charged to the receiver, with no intent requirement.

- Accept Rs. 3,00,000 in cash from one person and the penalty is Rs. 3,00,000, separate from any tax on the income itself.
- The penalty falls on whoever receives the cash; there is no benefit-of-doubt or good-faith carve-out.
- The law does not require intent to evade tax. The act of receiving Rs. 2 lakh or more is the violation.
- The receiver carries the risk, so it is the receiver who should insist on a bank transfer above the limit.

## Who is exempt from Section 269ST?

> **Short answer:** Government bodies, banks, and post offices are exempt; cash loans and deposits sit under [Section 269SS](https://www.incometaxindia.gov.in/Pages/acts/income-tax-act.aspx) with its own Rs. 20,000 limit instead.

- Government entities, banks, and post offices receiving cash are outside Section 269ST.
- Loans and deposits are governed by Section 269SS (Rs. 20,000 cash limit), not 269ST.
- Receipts by way of inheritance or will are exempt.
- No exemption covers rent collection, real estate payments, service fees, or ordinary business receipts. Those are squarely caught.

## When does this catch landlords, sellers, and service providers?

> **Short answer:** Any cash receipt of Rs. 2 lakh or more from one tenant, buyer, client, or family in a day or for one event breaches the cap.

Monthly rent paid in cash up to Rs. 1.99 lakh is technically within the wording, but the daily-aggregate prong means several cash payments from the same tenant on one day can still cross the line.

| Who receives | Caught when |
| --- | --- |
| Landlord | Cash rent or deposit of Rs. 2 lakh or more from one tenant in a day |
| Property seller | Cash earnest money, brokerage, or part payment above Rs. 2 lakh |
| Consultant / contractor / tutor | Cash above Rs. 2 lakh for a single contract or project |
| Caterer / decorator / tent house | Cash above Rs. 2 lakh for one event from a single family |

*Common Rs. 2 lakh-plus cash receipts caught by Section 269ST. Source: Section 269ST, Income Tax Act 1961.*

**[Issue a 269ST-aware payment receipt](https://hrareceipt.in/misc-receipt)**

## How do I stay compliant with Section 269ST?

> **Short answer:** Take any payment of Rs. 2 lakh or more by UPI, NEFT, RTGS, account-payee cheque, or bank transfer, all of which fall outside Section 269ST.

- Banking-channel receipts create an audit trail and are exempt, so they remove the risk entirely.
- Watch the daily-aggregate prong: several sub-limit cash receipts from the same person in one day can still cross Rs. 2 lakh.
- Always issue a [payment receipt](/misc-receipt) recording the payment mode and the UTR or reference number, which protects both sides in any later inquiry.
- For the difference between an invoice, a receipt, and a quotation, see [invoice vs receipt vs quotation](/answers/invoice-vs-receipt-vs-quotation).

## Primary sources

- [Section 269ST, Income Tax Act 1961 — Income Tax Department](https://www.incometaxindia.gov.in/Pages/acts/income-tax-act.aspx) — Rs. 2 lakh cash receipt prohibition
- [Section 271DA, Income Tax Act 1961 — Income Tax Department](https://www.incometaxindia.gov.in/Pages/acts/income-tax-act.aspx) — 100% penalty on Section 269ST violations
- [Section 269SS, Income Tax Act 1961 — Income Tax Department](https://www.incometaxindia.gov.in/Pages/acts/income-tax-act.aspx) — Separate Rs. 20,000 limit on cash loans and deposits
- [Finance Act 2017 — Ministry of Finance](https://www.indiabudget.gov.in/) — Section 269ST introduction

## Related

- [Invoice vs Receipt vs Quotation — what each document does](https://hrareceipt.in/answers/invoice-vs-receipt-vs-quotation)
- [Section 269ST cash transaction limit explained](https://hrareceipt.in/answers/section-269st-cash-transaction-limit)

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*Source: [Cash Receipt Limit Rs. 2 Lakh — What Is Section 269ST?](https://hrareceipt.in/answers/section-269st-cash-transaction-limit) — HRAReceipt.in*
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