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Cash transactions

29 March 2016

Dear Colleagues,

We are handling a shipping company accounts. Recently we started receiving payments through cash from various customers. Is there any implications on our accounts and Taxes when we accept cash at our accounts. Pls guide and assist.

Regards,

Uday

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3 Replies

V P Narasimhan (Accounts Manager) (791 Points)
Replied 18 April 2016

Normally cash transaction has to be avoided Bank transactions are always good since if any pros & cons arisedby the Income Tax Department Bank statement will come to rescue. In shippin Industry inflow will be heavy which tempts/leads to malpractises may arise.

UDAYAKUMAR CN (GM) (25 Points)
Replied 19 April 2016

Dear Sir,

We always insists to customer for payment through Cheque/RTGS/DD/NEFT/IMPS only and we are strict to tax norms in the country. But some of the customers directly deposit cash instead of above said mode of transaction. My query is that such cash transaction by the customers will make nay impact on our tax or not

Thanks N regards

Uday

Ruchi (CA) (1410 Points)
Replied 19 April 2016

You can accept cash from your customers and there is no restriction to that. However, you must maintain a proper record of your cash receipts on daily basis and also keep on depositing excess cash in your bank to avoid unnecessary hassles.