Kevin Moses Paul
28 September 2021
As per your concern let me inform you that the maximum cash which a buyer could pay and a seller could recieve in a transaction related to an immovable property in Rs. 20,000/- (twenty thousand). Although, many sellers lure their property buyers stating that an amount of Rs. 10,00,000/- (ten lakhs) is permitted however it ain't true.
Basically the biggest confusion of any buyer or seller during the sale of an immovable property is whether it is possible for the IT (Income Tax) department to know about the cash payment made during a transaction. According to the law a penalty of 100% can be levied upon the seller for taking money in cash payments, moreover, this does not means that buyer does not suffer losses. On such a penalty, a seller would be imposed with a penalty amount through the IT Department.
For instance, in your case the buyer has asked for an amount of Rs. 10,00,000/- (ten lakhs) to be maid in cash/black, this means he would be imposed with a penalty of Rs. 10,00,000/- (ten lakhs) only. While, a penalty can also be levied upon the buyer for generation of such an amount in cash.
All this is stated under the Section 269SS of the Income Tax Act (or IT Act), 1962.
This section states that —
any deposit or loan or any specific amount should not be accepted or taken from any person other than by an account payee bank draft, account payee cheque, or through electronic clearing system via bank account, if in case:-
✴️The amount of deposit or loan or specified sum is Rs.20, 000 or more.
✴️The sum total of deposit, loan, and the specified sum is Rs.20, 000 or more. To understand this, let us take an example, suppose Rajat wants a loan of Rs.9, 000 and advance of Rs.7, 000, and deposit of Rs.6, 000 from his friend Anand. However, he cannot accept this whole amount in cash as it is more than Rs.20, 000 (it is Rs.22, 000).
✴️A person has already got the loan or specified sum or deposit through the depositor; however, the amount of loan or specified sum, or deposit has not been paid back. In such a situation, if the specified sum, deposit, or loan is Rs.20, 000 or more.
✴️The sum of the above three points is Rs.20, 000 or more.
Henceforth, though the buyer in your case will be held liable to pay the 100% amount as penalty, the IT department can also impose fine upon you too for getting into such a transaction.
Hope It Helps!
Regards,
Kevin M. Paul
