CBDT Reduces Daily Cash Limit For Payments – Check Details
The Central Council of Direct Taxes (CBDT) amended the Income Tax Rules, 1962, to reduce the cash payment limit for payments made to a person in one day. The 6DD Income Tax Rule which deals with the cases and circumstances in which a payment or total of payments exceeding Rs 20,000 can be made to a person in one day other than by an account payee check drawn on a bank or bank draft of the account beneficiary, has been changed. The maximum amount for such cases under the 6DD income tax rule currently stands at Rs 10,000.
The amended income tax rule 6DD says: “The cases and circumstances in which a payment or a total of payments in excess of Rs 10,000 can be made to a person in one day, other than by an account payee check drawn on a bank draft or the use of an electronic clearing system via a bank account or via any other electronic mode as prescribed in Rule 6ABBA. “;
Rule 6ABBA is deemed to have been inserted from September 1, 2019, which mentions any digital or electronic payment method includes
(A credit card
(b) Debit card
(c) Net banking
(d) IMPS (Instant 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 »
The Central Council of Direct Taxes made the rules to change the income tax rules, 1962, and the new rules can be called the Income Tax (3rd Amendment) rules, 2020. Simply put , payments other than by electronic means, ie cash is limited to Rs 10,000 per day, where applicable.