Cash limit

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virender (Querist)

24 June 2013 sir please solve my query
1.what is the limit of cash purchase of a company
2.sale of exempt sale limit of a company
3. limit of cash sale of a company
thanks
Virender

Ganeshbabu K

Ganeshbabu K (Expert)

24 June 2013 1)any cash expence for more than 20000 is disallowed as per section 40(A)(3) except for purchase of captal items.however generally companies will put some limit on cash purchases as a internal control procedure..generally it will be fixed by companies at 5000

2)could not able to under stand the question

3)ask company whether they have any policy on making cash sale..generally there will not be any limit because company always look for early receipt of cash...so no need of this limit but do verify whether strict internal controls placed in this matter.i means whether persons handling this transaction properly,, ask company policy to deposit cash sales to bank account..generally companies will deposit cash sales to bank with in a day or 2 days,whether it is being done or not..whether surprise cash verification is being done and cash insurance is must if amount involved is more

Thanks & regards
Ganesh babu k

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