Transaction limit
This query is : Resolved
ganeshchoudhary
(Querist)
18 September 2017
Hello sir/madam, I am confused about cash transaction limit for business. Plz help me in this problem
CA Rashmi Gandhi
(Expert)
18 September 2017
You can't receive more than Rs.200000/- for one transaction in a day with single person.
Also no deduction for expenses allowed if you pay more than Rs.10000/- in cash.
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ganeshchoudhary
(Querist)
18 September 2017
What if I pay cash for bills more than 10000. Will there be any problem.
02 August 2025
Great question! Here’s a quick breakdown:
* **If you pay more than ₹10,000 in cash for any expense**, that expense **won’t be allowed as a deduction** while computing your taxable income. This is under Section 40A(3) of the Income Tax Act, aimed at discouraging large cash transactions.
* Also, **cash receipts from a single person exceeding ₹2,00,000** in a day are disallowed under Section 269ST (to curb black money).
So, paying bills over ₹10,000 in cash can lead to **disallowance of that expense** for tax purposes, which means your taxable income might increase.
**Best practice:** Try to make payments over ₹10,000 through banking channels (cheque, NEFT, UPI, etc.) to avoid these issues.
* **If you pay more than ₹10,000 in cash for any expense**, that expense **won’t be allowed as a deduction** while computing your taxable income. This is under Section 40A(3) of the Income Tax Act, aimed at discouraging large cash transactions.
* Also, **cash receipts from a single person exceeding ₹2,00,000** in a day are disallowed under Section 269ST (to curb black money).
So, paying bills over ₹10,000 in cash can lead to **disallowance of that expense** for tax purposes, which means your taxable income might increase.
**Best practice:** Try to make payments over ₹10,000 through banking channels (cheque, NEFT, UPI, etc.) to avoid these issues.
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