Cash payment exceeding 20000 for purchase of fixed asset

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Priyanka Garg

Priyanka Garg (Querist)

15 June 2015 Can cash payment made in excess of 20,000 for purchase of Fixed Asset?

CMA MALHAR BEHERA

CMA MALHAR BEHERA (Expert)

16 June 2015 Section 40(a)(3) of Income tax provides that any expenditure incurred by an assessee (whether individual, company, firm etc.) above Rs. 20000/- other than by account payee cheque or draft shall not be allowed as a deduction. This section covers those payments over Rs. 20000/- made by bearer cheque or cash.
However, if the payments are made for hiring or leasing carriages for goods such as lorries, trucks etc then the limit is extended to Rs 35000/-.

Ankur Singhal

Ankur Singhal (Expert)

16 June 2015 Yes priyanka garg
you can purchase assets exceeding Rs. 20000/- in cash.

But from 1/06/2015 cash payments exceeding Rs.100000/- need to be backed by PAN No.

Rupesh Jain

Rupesh Jain (Expert)

16 June 2015 you can buy fixed assets in cash exceeds rs. 20000/-. but now you cannot but immovable property in cash exeeds rs. 20000/- psl see section 269SS.

Ramesh

Ramesh (Expert)

05 February 2016 Rupesh Sir,
Please advise what are the consequences if Rs. 2,50,000 accepted as cash and shown in sale deed.
Thanking you in anticipation
Ramesh

Rupesh Jain

Rupesh Jain (Expert)

06 February 2016 Section 271D of Income Tax Act 1961 provides that if a loan or deposit is accepted in contravention of the provisions of section 269SS then a penalty equivalent to the amount of such loan or deposit may be levied by the Joint commissioner.

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