Cash Payments.
This query is : Resolved
16 April 2010
There is a limit in the Income tax that payment of More than Rs.20000/- must be made through Bank.
If suppose the trader sell his product for Rs.50000/- and he wants the buyer to pay cash. Please tell the procedure and method to do the payment in this situtation. Shall we get the payment in Vouchers. Please reply.
01-05-10 Most of experts replied that it can be split. o.k. I accept. But the problem is , the buyer wont do this, At point of purchase, they may not have the cheque book, or they may not have the time to make the DD etc. So, i feel that the obligation put up on the buyer and sellers is wrong? Please reply.
If suppose the trader sell his product for Rs.50000/- and he wants the buyer to pay cash. Please tell the procedure and method to do the payment in this situtation. Shall we get the payment in Vouchers. Please reply.
01-05-10 Most of experts replied that it can be split. o.k. I accept. But the problem is , the buyer wont do this, At point of purchase, they may not have the cheque book, or they may not have the time to make the DD etc. So, i feel that the obligation put up on the buyer and sellers is wrong? Please reply.
CA. B.SRINIVASULU
(Expert)
16 April 2010
If your single bill is 50000 you cannot accept cash. The other alternate is get cash from your buyer. YOu purchase DD's of 25000 each from differnt banks and you bear the dd charge. This will solve your problem.
16 April 2010
Seller can sell goods in cash. But in buyer's hand puchases will be disallowed by virtue of the provisions of section 40A (3) of the Income tax Act,1961.
CA Prashant Gupta
(Expert)
16 April 2010
you can pay 20000/- first day 20000/- second day and rest 10000/- 3rd day. because in one day you can't pay more than 20000/- to one person.
second method as per rule 6DD you can pay him on Sunday i.e. bank holiday. but in case some time you have to explain that the payment was necessary on that day.
second method as per rule 6DD you can pay him on Sunday i.e. bank holiday. but in case some time you have to explain that the payment was necessary on that day.
CA. O.P. Agarwalla
(Expert)
19 April 2010
Whether this problem will be solved, if the purchases are made vide different orders, cash memo (all below 20000/-)?
Aditya Maheshwari
(Expert)
01 May 2010
the bills can be made below 20,000 or payment can be split so that not more than rs. 20,000 is paid in a day
20 March 2011
this case must be consider by the Income Tax Authority and the Fiscal policy Makers.
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