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Cash in hand

ITR 893 views 1 replies

Sudheesh Krishna

4 Points Joined August 2016

Hello ,

I would like to know about cash in hand limit which can company is allowed to maintain ?

Eg : suppose a company is having 9 cr rupees as cash in hand in Books but physcally its not in hand.

what will be the treatment in income tax point of view ? Is this is illegal or anything which income tax department or any other department can take action against ? . Please advice

Regards

Ananth

Replies (1)

CA Srujann kumar Reddy

Asst Manager(Internal audit)

1679 Points Joined May 2011

income tax act does not prescribe any limits of cash to maintain.

it all depends on the need of company or other person.

however if money is not present but in books it is present, it means it has been used for some purpose just recognise what is that purpose for which it is used.

if it an expenditure create expenditure and if it is a balance sheet item create as a balance sheet asset.

that is all....