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Cash limits & tax — receiving cash (269ST), TDS on cash withdrawal (194N)

✍️ Answered by EaseValue Advisors · Updated 17 Jul 2026 · 5-min read
Quick answer

Receiving ₹2 lakh or more in cash from one person in a day/transaction attracts a 100% penalty under Section 269ST — on the receiver. Large cash withdrawals attract TDS under Section 194N, and big cash deposits are reported to the department and can trigger a notice.

Receiving cash — the ₹2 lakh wall (Section 269ST)

No one may receive ₹2,00,000 or more in cash from a single person in a day, for a single transaction, or for one event. Break the rule and the penalty equals the amount received (100%), levied on the receiver.

Example — selling gold for ₹60 lakh in cash: the seller receiving ₹60 lakh cash breaches 269ST and faces a penalty of up to ₹60 lakh. Always take the payment through the bank. Separately, the gold sale is a capital gain (long-term at 12.5% if held over 24 months) — see capital gains, and you can save it via 54F / 54EC.

TDS on cash withdrawal (Section 194N)

  • Banks deduct 2% TDS on cash withdrawals over ₹1 crore in a year.
  • If you haven't filed ITR for the last 3 years, it's 2% above ₹20 lakh and 5% above ₹1 crore.
  • A senior citizen withdrawing ₹15 lakh (having filed ITRs) is below the threshold — no 194N TDS.

Big cash deposits are reported

Banks report cash deposits of ₹10 lakh+ a year (and similar high-value transactions) to the department via the SFT/AIS. Large unexplained cash can invite a query — keep evidence of the source.

Bottom line

Route large amounts through the banking channel, keep proof of source, and report the underlying income (capital gain, business, etc.) correctly.

General information based on the Income-tax Act as it stands, not advice on your specific case. Tax outcomes depend on your exact facts and residential status. © EaseValue Advisors LLP.
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