Monetary Limit

A monetary limit refers to a specified financial threshold set by tax authorities, regulatory bodies, or laws to determine the applicability, eligibility, or scope of certain tax provisions, actions, or exemptions. It acts as a benchmark value to simplify administration and ensure proportional enforcement of laws.

Key Features:

It defines the minimum or maximum amount for a particular tax treatment, filing requirement, or legal action. Monetary limits are commonly used to decide when appeals, audits, exemptions, or deductions are applicable. They help reduce administrative burden by focusing on significant cases and excluding minor ones.

Examples: The monetary limit for tax audits under Section 44AB of the Indian Income Tax Act (e.g., ₹1 crore for business or ₹50 lakh for professionals). The monetary limit for filing appeals by the Income Tax Department before appellate authorities like ITAT, High Court, or Supreme Court. A threshold exemption limit for GST registration — e.g., ₹20 lakh turnover for service providers.