Cash Deposit towards sales will be taxed ?

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This query is : Resolved

Hasmukh (Querist)

06 February 2009 Sir,

Can we accept unlimited cash towards supply of material ?

Will it be harmful under Income Tax Law ?

Will it be taxed ?

Is there any case law for this, if yes than send me.

Hasmukh Patel

Jitender

Jitender (Expert)

07 February 2009 u can accept it, but the person who will pay to u, then the exp will be disallowed to him if it crosses 20000.

K V Subba Rao

K V Subba Rao (Expert)

07 February 2009 As rightly opined by Sri Jitender, acceptance of cash towards Sales doesn't adversely affect you from Income tax point of view.

But Person who pays you cash is your Customer. In order to maintain coordial relations with Customers, it is desirable for you to orally infom your Customer of tax implications in assessment of his activities, if he pays cash due to unawareness

Normally all business people are aware of tax implications.

Any way, from your side, do NOT transfer or appropriate the amount in due course also towards Security Deposit etc., because acceptance of cash towards Security Deposit has tax implications

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