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Cash Transaction (limit rs. 20,000)

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(Querist)
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.
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Ram Avtar Singh

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Ram Avtar Singh (Expert)
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.
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Murtaza I Bhagat

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Murtaza I Bhagat (Expert)
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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