Section 186 — Cash Receipt INR 2L Bar | ITA 2025

Section 186 — - RESTRICTION ON CASH RECEIPTS

Section 186 is the substantive equivalent of 1961 s. 269ST -- the BLANKET CASH-RECEIPT BAN introduced FA 2017 as part of post-demonetisation digital-economy push. PROHIBITS receipt of INR 2,00,000 OR MORE in cash from any person: (a) in aggregate from a person in a day; OR (b) in respect of a single transaction; OR (c) in respect of transactions relating to one event or occasion from a person. So receipt of INR 2L+ in cash for a single wedding / event / transaction triggers prohibition. Penalty (s. 271DA equivalent) = sum equal to receipt. Carve-outs: Government / banking company / specified institutions. The provision is BROADER than s. 185 -- covers ANY receipt (sale / rent / fee / advance) not just loans / deposits.

Statutory text — Income-tax Act, 2025

Marginal note -- No person shall receive INR 2,00,000 or more in cash

(1) No person shall receive an amount of ` 200000 or more—

(a) in aggregate from a person in a day; or

(b) in respect of a single transaction; or

(c) in respect of transactions relating to one event or occasion from a person, except through—

(i) an account payee cheque; or

(ii) account payee bank draft; or

(iii) electronic clearing system through a bank account; or

(iv) any other electronic mode, as may be prescribed29a.

(2) Sub-section (1) shall not apply to—

(a) any receipt by Government, any banking company, post office savings bank or co-operative bank;

(b) transactions of the nature referred to in section 185;

(c) such other persons or class of persons or receipts, as may be notified by the Central Government. Acceptance of payment through prescribed electronic modes.

Corresponding provision — 1961 regime

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 -- s. 186	INCOME-TAX ACT, 1961 -- s. 269ST [FA 2017]
Cash receipt INR 2L+ prohibition: aggregate / single transaction / one event	1961 s. 269ST
Government / banking carve-out	1961 s. 269ST Proviso

STATUTORY ARCHITECTURE

THREE-LIMB AGGREGATION TEST: (a) AGGREGATE PER PERSON PER DAY: total cash received from same person in a day >= INR 2L; (b) SINGLE TRANSACTION: single transaction-amount >= INR 2L (regardless of payer); (c) ONE EVENT / OCCASION: cash received from ONE person for transactions relating to ONE EVENT (typical: wedding / festival / function). Effect: hospitals, jewellers, real-estate agents, wedding planners, schools, hotels, etc. cannot receive INR 2L+ cash from any client / patient / customer for any reason (excluding bank deposits in own bank). PENALTY (s. 271DA equivalent): equal to amount received in cash. So receipt of INR 5L cash = INR 5L penalty in addition to TDS / tax exposure on under-reporting if any. CARVE-OUTS: Government / banking company / Post Office Savings Bank / specified persons. Practitioner: post-2017, virtually all retail / B2C cash transactions above INR 2L are illegal; digital-payment migration was the policy intent.

PLANNING NOTES

(i) DIGITAL-PAYMENT INFRASTRUCTURE -- mandatory for any business with INR 2L+ ticket size; UPI / cards / NEFT / IMPS. (ii) HOSPITAL / SCHOOL / WEDDING -- strict daily cash limit; no aggregation of multiple days for single event. (iii) JEWELLERS / REAL-ESTATE -- particularly affected sectors; KYC norms also tighten cash-handling. (iv) INSTALMENT STRUCTURE -- splitting INR 2L into multiple INR 1.5L instalments doesn't help if relating to one event / one transaction (anti-fragmentation).

CROSS-REFERENCES

Section 185 -- Loan/deposit acceptance mode.
Section 187 -- Electronic payment facility.
Section 271DA / equivalent -- penalty for s. 186.

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