Limit on cash purchase

CASH PURCHASE IS ALLOWED UPTO RS 200000 AS PER IT ACT 

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Section 269ST of Income Tax Act

Section 269ST of Income Tax Act provides that no person can receive an amount of INR 2 Lakhs or more in cash:

• In aggregate from a person in a day;
• In respect of a single transaction; or
• In respect of transactions relating to one event or occasion from a person.

Provisions of Section 269ST are not applicable, when cash of more than Rs.2 lakhs is received from following person:

• Government;
• Any banking company, post office saving bank or co-operative bank;
• Institution, association or body or class of institutions, associations or bodies notified by Central Government in its official gazette.