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Acceptance of cash exceeding Rs. 20000 from a debtor

Statutory Audit 737 views 8 replies
Hello, 
My query is that can a company accept an amount exceeding Rs. 20,000 in cash , as an advance from debtor?
Also, please confirm provisions of Sec 206C (TCS) if services rendered during year exceed 2L (different invoices have been made).
Replies (8)
NO , YOU CAN NOT GET EXCEEDING RS 20 THOUSAND IN CASH FROM DEBOTORS AS PER U/S 40 A
but it specify for payment only...?

Hi,

If you want to receive the payment in cash than tell the debtors to deposit it directly in bank accounts by cash mode it can not violate the section 40 (a) (3).

Section 206c is applied for single invoice only if different invoice has been prepared than this section is not applicable.

Sorry Viral Sir, I don’t understand ,,,,,,,,,,,,, yes the debtor can deposit cash in bank ,,,,,,,,,,,,,,, but in fact, cash amount less ( Debit ) to Simran cash in hand when he make entry in his cash book and bank books , so how can he get amount from debtor ,…

I dont understand please eleborate it in detail.

AFTER CASH DEPOSIT IN COMPANY BANK A/C ,,,,,,THAN THE COMPANY ENTRED IN THEIR ACOOUNTS BOOK THIS ENTRY AS FOLLOW: VOUCHER TYPE: CONTRA Dr : BANK A/C CR : CASH (MEANS CASH OF COMPANY) THE DEBITOR A/C WILL BE SAME

Hi,

The journal entry would be as follows

suppose Mr.A is depositing the cash in XYZ pvt ltd than the entry would be

Bank account Dr..

To Mr. A account.

VIRAL SIR, ,,,,,,,ITS OK ,,,,,,,BUT IN THE BANK STATEMENT THE ENTRY SHOW CASH DEPOSIT NOT DEBITORS NAME,,,,,,,THE AUDITOR CAN BE ASK TO COMPANY ABOUT THIS ENTRY AND WHEN THE AUDITOR SAYS THAT ,,,,,YOU SHOULD FIRST CASH RECEIVED FROM DEBITOR IN YOUR CASH BOOK AND AFTER THAT SECOND ENTTRY CASH DEPOSIT IN BANK ,,,,,,,,,IN THIS TRANSACTION THE PROBLEM OF CASH RECEIVE EXCEED RS 20000 WILL BE REMAIN SAME


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