cash deposit in bank account

the nature of my business is cash sales. so whatever cash i get from my customers i make a lumpsum deposit in bank.

is it against income tax law and does it make me more prone to scrutiny by income tax dept.

Replies (12)

No , it i not agaisnt law.

For example, in a readymade garment showroom , cash sale is made, next day the cash collected from customer is deposited to bank.

Agree with Mr. Bijendra. You only have to be carefull in cash payment of expenditures which should not increase more than Rs. 20 K in once to a single person.

Originally posted by : Abhimanyu Bind

Agree with Mr. Bijendra. You only have to be carefull in cash payment of expenditures which should not increase more than Rs. 20 K in once to a single person.

i agree with Mr. Bijendra sir

you can do so.....................

BUT MAKE YOUR SURE THAT YOUR INCOME TAX RETURN tallies with the amount of cash deposit. because in your case amnt of cash deposit can considered as amount of sales and if you are not showing that much amount of sales in your return then you may get into trouble.

Agree with Mr. Bijendra. You only have to be carefull in cash payment of expenditures which should not increase more than Rs. 20 K in once to a single person.

In case of Cash Sales what ever is the collection, you might be depositing on a lumpsum basis in the bank. There is no problem relating to income tax. But you have to be careful while preparing your income statement that how much sales you are disclosing and what is the expenditure you have incurred and claimed against that sale. In case of Payment for any expenses a single Payment should not be more than 20000.

Hi

I have the following queries:

1. Are we required to maintain the identiy of the customers who are purchasing goods more than Rs.20,000/- in cash ? normally we donot have a customer name / address field in the Cash Memos we issue. Can the I-T deptt in any way harass us for this ?

 

2. Is there any problem if we hold large amountsw of Cah in Hand ? say over 15 lacs on Fy closing or in between ?

Originally posted by : Ullash

Hi

I have the following queries:

1. Are we required to maintain the identiy of the customers who are purchasing goods more than Rs.20,000/- in cash ? normally we donot have a customer name / address field in the Cash Memos we issue. Can the I-T deptt in any way harass us for this ?

 

2. Is there any problem if we hold large amountsw of Cah in Hand ? say over 15 lacs on Fy closing or in between ?

i have the same query  as point no.1

is it reqd to mantain records of customers who are purchasing goods more than 20000.

and how does it matter with cash sales if  it has been made in same state or inter-state??

Originally posted by : CHIRAG DEEPAK GANATRA

Agree with Mr. Bijendra. You only have to be carefull in cash payment of expenditures which should not increase more than Rs. 20 K in once to a single person.

No Not At All. You Are not requied to maintain the details of Parties who purchases above above 20000

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
26 September 2026
Chartered Accountant

pushpganga ventures

Pune

CA

View Details
Company
12 October 2026
AUDIT , ACCOUNTS AND TAXATION

KDSS

New Delhi

B.Com

View Details
Company
08 October 2026
Accounts and Tax Associate

POOJA R TELI & CO

Pune

CA Inter

View Details
Company
ARTICLESHIP 28 September 2026
Junior Accountant

J S P M & Associates LLP

Pune

B.Com

View Details
Company
05 October 2026
Senior Accountant

Vision IT Peripherals Pvt Ltd

Mumbai

B.Com

View Details
Company
ARTICLESHIP 23 October 2026
CA Articleship / Article Assistant

M N Rao & Associates LLP

Vijayawada

CA Inter

View Details
Company
06 October 2026
Assistant Manager - Audit and Compliance

Ravi K Jain & Co

Noida

Others

View Details
Company
ARTICLESHIP 17 October 2026
Articled Assistant

RRPM & Associates LLP

Chennai

CA Inter

View Details