- By Soumyaroop Mukherjee
- Sun, 07 Dec 2025 05:25 PM (IST)
- Source:JND
In a bid to regulate banking activities in the country, the government is set to introduce new rules on cash transactions that could significantly affect the transactions of the people. According to investment banker Sarthak Ahuja, unaccounted cash found in possession of any individual will now draw a penalty of nearly 84 per cent, including penalties, surcharges and cess.
In a LinkedIn post, Ahuja posted a detailed outline of India’s revised cash-handling rules and the heavy penalties that are now applicable to individuals and businesses. “Everyone should know the regulations that are now coming into order,” he wrote, stressing that 84 per cent tax liability applies if unexplained cash is discovered at one's premises during a search or seizure by the Income Tax Department.
How Have Cash Transactions Changed Under New Rules?
Under the new regulations, the following rules will be applicable:
- If someone withdraws over Rs 10 lakh in cash in a financial year, banks can report it to the Income Tax Department.
- If someone withdraws over Rs 20 lakh, the bank will now deduct TDS (tax deducted at source) on the withdrawal.
- Repeated large withdrawals could prompt the department to initiate a search or seizure, particularly if the source is unclear.
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Transactions Attracting 100% Penalty:
In the post, Ahuja also detailed cash transactions, which now attract a 100 per cent penalty. These transactions are:
- If you sell any immovable property and receive cash of more than Rs 20,000 against it, a 100 per cent penalty will be imposed on such cash receipt.
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- If you receive more than Rs 2 lakh in cash from one customer in a day, then a 100 per cent penalty will be imposed on the entire amount.
- If you take a loan from someone in cash, you will have to pay a 100 per cent penalty on that amount, as no loans are allowed to be taken in cash.