Cash payments less than 20000, but payment is made everyday

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 August 2016 how to deal with the situation when cash payment is made to a party for less than 20,000 in a day, but daily through out the year.

can the AO disallow the expenditure??

How to deal it as an auditor??

Amol S Joglekar

Amol S Joglekar (Expert)
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12 August 2016 No need to disallow anything........day on day basis , it is not crossing the limit.

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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13 August 2016 As per Rule-6D where any payment in a sum exceeding twenty thousand rupees is made otherwise than by an account payee cheque drawn on a bank or account payee in a day. So if it is less than Rs.20000/-no problem but you have that much of Cash balance in your account to pay through out the year.

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