Maintanance of huge cash balance by educational society
This query is : Resolved
05 January 2018
Hello,
Iam an article assistant auditing a well known educational society which is maintaining cash balance of 25lacs to 33lacs daily and are not depositing into bank on a daily receipt of fees collected from students.
When i put a question to them, they didnot gave me satisfying reply why the cash balance is huge.
"What are the tax complications to be faced by society by maintaining a cash balance?" though the source is fees collected from students.
What questions may be raised by Assessing officer?
Is there any section regarding the maintenance of cash balance?
Thankyou.
Iam an article assistant auditing a well known educational society which is maintaining cash balance of 25lacs to 33lacs daily and are not depositing into bank on a daily receipt of fees collected from students.
When i put a question to them, they didnot gave me satisfying reply why the cash balance is huge.
"What are the tax complications to be faced by society by maintaining a cash balance?" though the source is fees collected from students.
What questions may be raised by Assessing officer?
Is there any section regarding the maintenance of cash balance?
Thankyou.
06 January 2018
There are as such no legal consequences if they are maintaining huge cash balances in hand. Only thing is that this cash balance should be explainable with the records.
However you can raise the following queries to them :-
1. How this huge cash is spent ? What are the cash expenses incurred ? Are these allowed as per Act ? Check the supportings for the cash expenses.
2. From safety point of view it is not safe to keep such huge cash in hand.
However you can raise the following queries to them :-
1. How this huge cash is spent ? What are the cash expenses incurred ? Are these allowed as per Act ? Check the supportings for the cash expenses.
2. From safety point of view it is not safe to keep such huge cash in hand.
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