transporter payament
This query is : Resolved
20 March 2009
hi
i m facing problem payament of transporter if amount Rs.20000/- above how to maintain the books and because transporter want cash?
i m facing problem payament of transporter if amount Rs.20000/- above how to maintain the books and because transporter want cash?
20 March 2009
You cannot make a cash payment for a bill amounting to more than Rs. 20,000. However you can pay cash against 2-3 bills for more than 20,000 if the individual bill does not exceeds 20,000.
Further also note that you need to deduct TDS on transporter bills.
Further also note that you need to deduct TDS on transporter bills.
21 March 2009
i know very well i cant payment exceed 20000/-but what salution if exceed payment one bill transport want cash also transpoerter not accept cheque when what do?
i know very well i cant payment exceed 20000/-but what salution if exceed payment one bill transport want cash also transpoerter not accept cheque when what do?
02 August 2025
Got it — so your transporter wants cash payment for a single bill over ₹20,000, but you know that payments over ₹20,000 in cash are not allowed under tax laws.
Here are some practical solutions you can consider:
### 1. **Explain Legal Restrictions to Transporter**
Politely explain that cash payments above ₹20,000 are illegal and could cause trouble for both parties. Most professionals understand and accept this once clarified.
### 2. **Split the Payment into Multiple Bills**
If the transporter agrees, ask them to issue multiple bills each below ₹20,000. You can pay cash against each smaller bill, complying with the limit.
### 3. **Use Digital Payments or Demand Draft**
Suggest using other payment modes like bank transfer, demand draft, or digital wallets. These are safer and legal.
### 4. **Issue Payment through Third Party (Not Recommended)**
Some try paying through someone else or intermediaries, but this may cause compliance risks and is not advisable.
### 5. **Maintain Proper Documentation**
* Always get proper bills/invoices.
* Deduct TDS as per rules (usually 1% or 2% under section 194C).
* Record payments properly in books.
### 6. **Last Resort: Consult a CA or Legal Advisor**
If transporter absolutely refuses to accept non-cash payment, you might want to consult a tax professional for specific advice or escalate the matter.
---
**Note:** Cash payments over ₹20,000 are against the Income Tax Act (Section 40A(3)), and such payments are disallowed as business expenses, so better avoid cash above this limit.
---
Do you want me to help draft a polite communication to your transporter explaining this?
Here are some practical solutions you can consider:
### 1. **Explain Legal Restrictions to Transporter**
Politely explain that cash payments above ₹20,000 are illegal and could cause trouble for both parties. Most professionals understand and accept this once clarified.
### 2. **Split the Payment into Multiple Bills**
If the transporter agrees, ask them to issue multiple bills each below ₹20,000. You can pay cash against each smaller bill, complying with the limit.
### 3. **Use Digital Payments or Demand Draft**
Suggest using other payment modes like bank transfer, demand draft, or digital wallets. These are safer and legal.
### 4. **Issue Payment through Third Party (Not Recommended)**
Some try paying through someone else or intermediaries, but this may cause compliance risks and is not advisable.
### 5. **Maintain Proper Documentation**
* Always get proper bills/invoices.
* Deduct TDS as per rules (usually 1% or 2% under section 194C).
* Record payments properly in books.
### 6. **Last Resort: Consult a CA or Legal Advisor**
If transporter absolutely refuses to accept non-cash payment, you might want to consult a tax professional for specific advice or escalate the matter.
---
**Note:** Cash payments over ₹20,000 are against the Income Tax Act (Section 40A(3)), and such payments are disallowed as business expenses, so better avoid cash above this limit.
---
Do you want me to help draft a polite communication to your transporter explaining this?
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Payment for sale in March and Sale deed registration to be done in April
- Treatment of TDS under Section 194-IA in case of cancelled property transaction
- Eligibility for filling NEW Form 121 from April 2026
- Unable to file 3B monthly return
- REGARDING ITR OF TRUST
- Lifting and cross charges
- SSY for 2 daughters
- Missing tan number searach procedure in income tax portal
- Income tax on agriculture income with having business income
- Tds provison applicable on remenuration and interest for partners f.y.25-26
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Spice form, ? mark comes in address
- Tds on GST in connection with sale to public company
- B2B Amendment
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- Regarding Advance Tax not claimed in the Return of Income for A.Y. 2025-26
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
