44AB threshold limit.

Every person –

(a) carrying on business shall,  if his total sales, turnover or gross receipts,  in business exceed or exceeds

> one crore rupees in any previous year ..................... (when cash transaction is more than 95%)

In Budget 2020, Section 44AB was amended and the threshold limit was increased from Rs.1 Crore to Rs. 5 Crore in order to ease the compliance for taxpayer & to boost non-cash transactions, subject to the condition that:

• The Aggregate of all Cash receipts during the relevant previous year does not exceed 5% of total receipt.
• The Aggregate of all Cash payments during the relevant previous year does not exceed 5% of total payment

In other words, more than 95% of the business transactions (both receipts & payments) shall be done through banking channels.

From A.Y 2022-23, The Ministry of Finance has increased the threshold limit from, Rs. 5 Crore to Rs. 10 Crore in order to ease the compliance for taxpayer & to boost non-cash transactions.