CASH RECEIPT OF Rs.2 lacs

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This query is : Resolved

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This discussion clarifies whether a jeweller can legally pay customers up to Rs 2 lakhs in cash for their old gold. While Section 40A(3) of the Income Tax Act disallows deductions for cash payments exceeding Rs 10,000 per day for expenses, Section 269ST specifically addresses the receipt of cash. The key point is that Section 269ST applies to the recipient, not the payer, meaning a jeweller can receive cash up to Rs 2 lakhs without violating this section.

PANDIAN BRIGHT

PANDIAN BRIGHT (Querist)
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08 April 2023 Our Jeweler client Accepts old gold from customer and sell a new one to them. In some cases He has to pay cash to them for purchasing old gold. My query is, Can the jeweler pay cash up to 2 lacs to the customer. is it violating the sec 269ST?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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08 April 2023 According to Section 40A(3) of the Income Tax Act, if an assessee incurs any expense for which a payment or aggregate of payments was made to a person during a day in cash and the expenditure exceeds INR 10,000, the expenditure is not allowable as a deduction.
Even the purchase of goods falls under the term expenditure.