Courts & SROs must report cash transactions above 2 lakh
The Supreme Court directs the Courts and Registration Authorities to report cash transactions exceeding ₹2 lakh to the Income Tax Department, in a judgement in The Correspondence RBANMS Educational Institution VERSUS B. Gunashekar & Another [2025 INSC 490].
The Section 269ST of the Income Tax Act was introduced with effect from 01.04.2017 to curb black money. The Section prohibits any person from receiving an amount of Rs. 2 lakh or more in cash for a single transaction, or in aggregate from a person in a day, or for transactions relating to one event/occasion.
Cash transaction for Rs 2 lakh & above violates IT Act
The SC says that whenever any suit is filed claiming that a consideration of Rs. 2 Lakh or above is paid in cash towards a transaction, then the court should intimate the Income Tax Department whether there is a violation of Section 269ST of the Income Tax Act, 1961 (IT Act).
If any document mentioning payment of Rs 2 lakh or more in cash is presented for registration (like a sale agreement), the Sub-Registrar must inform the Income Tax Department, so as to prevent unreported cash transactions in real estate deals.
Officials should be punished for not reporting
And the failure of officials to report such cash transaction will lead to disciplinary action by the Chief Secretary of the State/UT.
Person receiving 2 lakh must pay equal amount as fine
Any person receiving an amount Rs 2 lakh or more in cash will have to pay an equal amount of penalty under Section 271DA of the Income Tax Act.
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