Cash Payment

If any cash payment exceeds 20000/- to any single party then what should the compliances and penalties in the Act??

If this amount bifurcated given in many parts to a single party then what compliance check in?
Replies (7)

payment more than 10000/- to party in day not allowed

u can split this amout and pay it in different day

 

its new compliance or old

It will be disallowed as a deduction in your tax return.

Even if its bifurcated into part payments there was an ammendment saying it will be disallowed totally!!

If we paid partly the limit of cash payment; yet disallowed totally...which type of ammendment in which section?
Section 40A (3) says "No deduction is allowed in respect of which a payment or aggregate of payments exceeding rupees twenty thousand (reduced to 10000/- wef 01.04.2017) are made to a person in a day otherwise than by....." So you can pay a single bill exceeding Rs 10000 in cash to the same party on different dates but not on the same date. Also note that there are no compliances or penalties for making cash payment of more than Rs 20000. Only consequence is that your expenses will be disallowed. In case of part payment in cash exceeding Rs 10000 the disallowance will be limited to the extent of cash payment only.
Thanks for inform me this amendment and i'll ask some another question about taxation??

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