Cash Transaction (limit rs. 20,000)

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yash chauhan (Querist)
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14 January 2010 Why cash transaction more than Rs. 20,000/- is disallow (or taxable) by I. Tax.?
is following allowable or disallowable?
1)Cash payment to creditor(supplier)more than Rs.20000 in a day in different cash voucher?
2)Cash sale more than Rs.20000?
3)cash purcahse more than Rs.20000?
can you Pls. explain in detail?
thank you.

Ram Avtar Singh

Ram Avtar Singh (Expert)
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14 January 2010 if you are paying cash more than 20000/ in a day for sale or purchase of rawmaterial its come under Sec 40A(3)of income tax. in this rule its disallow.

Murtaza I Bhagat

Murtaza I Bhagat (Expert)
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14 January 2010 agree to disallowed if your payment goes over 20,000/- to any single party then you have to give your party a a/c payees cheque or draft.but no cash have to given in a day to any single payment more than 20,000/-

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