Cash Balance

If the assessee is subject to wealth tax, he may have to pay 1% if the cash balance exceeds Rs.50,000/-.Otherwise I don' see any problem. Only thing one should be able to explain the sources of such cash balance.

no restriction from RBI

no restriction under the Income Tax Act

under the Income Tax Act you may be required to explain the source of cash

No specific rules for maintaining the cash balance.  It is depend up on the size of business and needed for business day to day transaction.  But as per the Income tax section 40(A) payment made above 20,000/- through the cheque only. 

Thanks every one for your reply.

Regards

Rangarajan.K