cash payment & receipt above rs 20000/-

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 June 2011
WE ALL KNOW THAT PAYMENT ABOVE RS 20000 IS NOT ALLOWED IN CASH.

IN CASE SOME ONE MAKES PAYMENT ABOVE RS 20000

OR RECORD A RECEIPT ABOVE RS.20000 IN CASH IN HIS BOOKS OF ACCOUNT.
WHAT COULD BE POSSIBLE ACCOUNTING IMPLICATIONS.

THANK YOU.

CA Harish Suwalka

CA Harish Suwalka (Expert)

16 June 2011 the ceiling limit is imposed by income tax act 1961, if one records any reciept and payment of above 20000 rs, there will not be any accounting implication but it will have effect when the tax audit will be carried out

Praveen Maheshwari

Praveen Maheshwari (Expert)

18 July 2011 Regarding Receipts of Cash Exceeding Rs. 20000/- there will not be any issue but in respect of payment the Expenditure will not be allowed while computing profit of Business as per provision of Section 40A(3) subject to Exception provided in Rule 6DD of Income Tax Act-1961.

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