Cash transaction limit: If you spend this much in cash while purchasing a home, an income tax notification will be sent, therefore be aware of the information

 Cash transaction limit: If you spend this much in cash while purchasing a home, an income tax notification will be sent, therefore be aware of the information

Cash transaction cap: The Income Tax Agency may send you a straight notice if you paid more than Rs 20,000 in cash to purchase real estate. The usage of cash in real estate transactions is subject to a special income tax rule intended to combat black money.

There is one straightforward rule of the real estate industry that you should be aware of if you plan to buy a home or already have plans to do so in the future. You cannot pay more than $20,000 in cash to buy a house.


The Income Tax Agency may issue you a direct notification if you spent more than $20,000 in cash on a piece of property.

In addition, Section 269T of the IT Act mandates that if a property transaction is cancelled, the transaction must be completed by check if it exceeds Rs 20,000 even after the money has been returned. If the payback is made in cash in this case as well, a 100% penalty will be applied to the total amount.

two things to keep in mind

Such farmers do not fall under this section because they are selling their land and are not subject to tax on any other income. Second, you must notify the Income Tax authorities of any transaction involving immovable property valued at Rs 30 lakh or more.