Cash purchase limit in one day

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Querist : Anonymous

Querist : Anonymous (Querist)

22 August 2014 Pls tel me that what is the cash purchase limit in particular day in private limited company

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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22 August 2014 under income tax act its rs 20,000 else exp is disallowed.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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22 August 2014 there is no limit to cash purchases but yes, if the cash payment made to a particular party exceed Rs 20000, then that particular payment shall be disallowed.

Deepak Nagori

Deepak Nagori (Expert)
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23 August 2014 Agree with previous solutions provided. Section applicable is 40A(3)

mehulmukati

mehulmukati (Expert)
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23 August 2014 I think the disallowance is only for revenue exprnditure. Hence, no limit if an asset is being purchased.
However, AO may still ask for proving availability of cash for asset purchase.

Vaibhav Sharma

Vaibhav Sharma (Expert)
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23 August 2014 Cash purchase (revenue expenses) limit from one party u/s 40(a) is rs. 20000 in a day. Cash purchase of assets have not limit but a.o have power to ask for availability of cash and if not setify with answer consider income thereof.