Expenses related

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This discussion clarifies tax implications for business expenses, particularly concerning cash purchases. Expenses made from unregistered dealers are generally allowed for income tax. However, there's a strict daily cash payment limit of £10,000 per person for most business expenses to be deductible. Payments exceeding this limit, or £35,000 for transporters, may be disallowed, increasing your taxable income.

deepak

deepak (Querist)

29 June 2025 If purchased from unregistered dealer, purchase expenses are allowed in income tax?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

29 June 2025 Yes, allowed. (from GST unregistered)

deepak

deepak (Querist)

29 June 2025 What is cash purchase of goods and services limit in business per day in income tax act?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

30 June 2025 Rs. 10,000/- per person per day.

deepak

deepak (Querist)

30 June 2025 What about less than 2 lac for cash payment per day allowed? Can we purchase goods in cash 150000 per day?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

30 June 2025 Cash Payments for Business Expenses (Section 40A(3)) IT act:

Limit: A business cannot claim a tax deduction for any expense exceeding INR 10,000 made in cash to a single person in a single day.
Exception: This limit is increased to INR 35,000 for cash payments made to transporters for hiring, leasing, or plying goods vehicles.
Implication: If you make a cash payment above these limits, the entire expense will be disallowed as a deduction, increasing your taxable income.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

27 September 2025 Good luck..

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