Cash Transaction

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Palak Chhajed

Palak Chhajed (Querist)
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03 April 2017 Sir, If i want to purchase capital equipment for construction of building , can i pay 2 lakh in cash ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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03 April 2017 Yes you can pay up to 2 Lacs.

Palak Chhajed

Palak Chhajed (Querist)
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03 April 2017 Sir, there is a limit of 10000 per day cash payment is it related to only revenue item and i can give 2 lakh in cash in a day because its a capital item?

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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03 April 2017 Yes you are right.................

Palak Chhajed

Palak Chhajed (Querist)
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03 April 2017 Thankyou Sir for solving my query.

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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03 April 2017 In view of 2017 budget amendment such capital equipment purchase payment in cash also restricted to 10000. My reply stands corrected.

Studentsca

Studentsca (Expert)
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03 April 2017 Section 43 of the Income Tax Act has been amended by Finance Act 2017 which states if the assessee incurs any expenditure for acquisition of any asset for which aggregate of payments made in a day exceeds Rs. 10,000/- then such expenditure shall be ignored for the purpose of determination of actual cost.

In the view of above mentioned amendment you are requested not to make payment of Rs. 2,00,000/- in a single day.

Palak Chhajed

Palak Chhajed (Querist)
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03 April 2017 That means even for capital items restrictions of 10000 is there w.e.f 1st april 2017 ?

Studentsca

Studentsca (Expert)
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03 April 2017 Yes you cannot pay more than Rs. 10,000/- per day for acquiring capital assets if you are paying in cash.

Avoid paying in cash altogether if possible.

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Palak Chhajed

Palak Chhajed (Querist)
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03 April 2017 Ok i will assure it. Can i pay 10000 in cash in a day to different dealers?

Studentsca

Studentsca (Expert)
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03 April 2017 Yes you can pay upto Rs. 10,000/-.

Palak Chhajed

Palak Chhajed (Querist)
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04 April 2017 Thankyou for solving my query.

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