Cash to sub contractors

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This discussion clarifies the rules around cash payments to subcontractors, particularly concerning Section 269ST of the Income Tax Act. It confirms that while cash receipts are permissible under presumptive taxation scheme 44AD, no single party, bill, or event can involve a cash transaction of Rs. 2 lakhs or more. The key is to ensure that individual cash payments do not exceed this limit, even if the total cash received from various parties sums up to a larger amount.

pooja

pooja (Querist)
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21 December 2021 I want to know whether sub contractors can get receipts in cash and can they show those receipts in 44AD

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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21 December 2021 As per sec. 269ST, from any one party/bill/event cannot accept Rs. 2 lakhs or more in cash mode.
Otherwise no query under presumptive assessment.

pooja

pooja (Querist)
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21 December 2021 Thanks , so if I show cash receipts of Rs.15 lakhs from different parties under 44AD, is that fine ..

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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21 December 2021 Yes, but take care receipt from non of the party is equal or exceed Rs. 2 lakhs, for the same contract in the FY.

pooja

pooja (Querist)
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21 December 2021 Yes...yes...I will take care of that..thanks a lot

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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21 December 2021 Most Welcome..