Controversy about advance transaction
This query is : Resolved
20 November 2010
A businessman had a proprietary concern. He does business on small scale basis. He receives cash of Rs. 1,00,000 as an advance for a particular transaction.
As transaction could not be materialised for 2 months, the businessman paid back Rs. 1,00,000 as cash immediately on next date.
My question is :
(A) Whether one can take advance of Rs. 1,00,000 as cash against goods?
(B) Whether one can return advance of Rs. 1,00,000 in cash?
As transaction could not be materialised for 2 months, the businessman paid back Rs. 1,00,000 as cash immediately on next date.
My question is :
(A) Whether one can take advance of Rs. 1,00,000 as cash against goods?
(B) Whether one can return advance of Rs. 1,00,000 in cash?
B R Ramesh
(Expert)
20 November 2010
Hi
U/s sec 40A of income tax act payments exceeds Rs.20000 paid to a person as expenditure or advance.
the same expenditure will be dis allowed & the entire amt to be taxed @ 30% in the hands of the provider.
hence it is not advisable to receive a cash
U/s sec 40A of income tax act payments exceeds Rs.20000 paid to a person as expenditure or advance.
the same expenditure will be dis allowed & the entire amt to be taxed @ 30% in the hands of the provider.
hence it is not advisable to receive a cash
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