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Cash Deposit by customer

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Ajit Tejwani

12 Points Posted on 25 January 2020

My customer wants to deposit cash money in my bank account in his city.

Is there any limit in doing this?

Replies (10)

Quick Summary

This discussion addresses the implications of customers depositing cash directly into a business bank account. While there isn't a strict limit on the amount itself, large cash deposits, particularly over Rs 2 lakhs, can trigger Section 269ST provisions, leading to a 100% penalty. Banks may also flag suspicious transactions for inquiry. It's generally advised to avoid such direct cash deposits and opt for cheques or other traceable methods to prevent potential issues with account verification and tax regulations.

CMA M.Keerthi chandra

C.A FINAL STUDENT AND QUALIFIED C.M.A

563 Points Posted on 25 January 2020

There is no such limit specified.

But, If he is maintaining books of Accounts, verify the cash balance and go ahead or else it will create problems at later point of time.

ajeet singh

1392 Points Posted on 25 January 2020

Yes there are some restrction

Roshni

Studwnt

1141 Points Posted on 25 January 2020

It shouldn't be more than 2,00,000 otherwise need to explain/report

CMA M.Keerthi chandra

C.A FINAL STUDENT AND QUALIFIED C.M.A

563 Points Posted on 25 January 2020

Such limit is not for the purpose of deposit in Bank Accounts.Please go through the clarification given by the Government in form of Press release.

CS Vishal Mehta

Self Employed

436 Points Posted on 25 January 2020

Any third party cash deposit in our account is a transaction presumed to be done by us only or by our behalf only. So in such a transaction, third party may not reflect any entry in his account but ours bank accounts are reflected, although there is no limit in cash deposit but yes there can also be an inquiry against a person holding bank accounts if the cash amount is too big or the transaction seems suspicious by bank officials.

Kapadia Pravin

17269 Points Posted on 25 January 2020

If it's excess of Rs 2 lakhs or more , such cash deposit by customer will invite 269ST provisions and there the penalty is 100% of such amount.

This is receipt transaction of cash by you to customer's account. Customer depositing cash is just an honorary service he provides to you. That's all. Nothing more than that.