Cash purchase limit in one day
This query is : Open
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
22 August 2014
under income tax act its rs 20,000 else exp is disallowed.
Nikhil Kaushik
(Expert)
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
(Expert)
23 August 2014
Agree with previous solutions provided. Section applicable is 40A(3)
mehulmukati
(Expert)
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.
However, AO may still ask for proving availability of cash for asset purchase.
Vaibhav Sharma
(Expert)
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.
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