Cash Purchase

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273 Points Posted on 01 February 2021
I have purchase goods in cash worth Rs. 25,000. Can I make a single cash payment of Rs. 25,000 for this one transaction ?
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On 01 February 2021 at 17:37 Report
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Quick Summary
For business purchases, paying more than Rs. 10,000 in cash to a single person in one day is not allowed under Section 40A(3) of the Income Tax Act. To comply, you should split the payment over multiple days or opt for a bank transfer. If the purchase is not for business, there are no such restrictions.

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7 Points Posted on 01 February 2021
As per Section 40A(3) of the income tax act, you cannot make cash payment exceeding Rs.10,000 per day to a single person. You should pay cash to him on 3 different days. Best way is to make payment via bank if you want to pay him on a single day.
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On 01 February 2021 at 18:32
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17269 Points Posted on 02 February 2021
If it is non-business goods purchase, it is ok. No issue. if it is business purchase then avoid cash purchase
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On 02 February 2021 at 00:09

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