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Cash related

madhu (Accountant) (37 Points)

07 August 2020

dear sir,madam
can anyone tell me what is the cash payments or receipt limit for fy 2020-21????

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CA KARAN SINGH (Auditor at Big 4) (622 Points)
Replied 10 August 2020

Business Expenditure (Capital or Revenue) - Maximum Rs. 10000 in cash is allowed.

Repayment or Accepting any loans or Deposit - Less than Rs. 20,000 in cash is allowed. (Acceptance or repayment of loan or deposit of Rs. 20000 or more in cash is not allowed)

Receipt of any nature other than loan or deposit: Less than Rs. 2,00,000 in cash is permissible (You cannot receive Rs. 2,00,000 or more in cash)

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Asha Kanta Sharma (Manager - Finance & Accounts) (10524 Points)
Replied 11 August 2020

Originally posted by : Karan Singh
	Business Expenditure (Capital or Revenue) - Maximum Rs. 10000 in cash is allowed. Repayment or Accepting any loans or Deposit - Less than Rs. 20,000 in cash is allowed. (Acceptance or repayment of loan or deposit of Rs. 20000 or more in cash is not allowed) Receipt of any nature other than loan or deposit: Less than Rs. 2,00,000 in cash is permissible (You cannot receive Rs. 2,00,000 or more in cash)

Agree...

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madhu (Accountant) (37 Points)
Replied 15 August 2020

Thanks once again sir

One more doubt sir as u said above receipt is upto 200000/- is permissible

Can wepurchase Goods by cash upto 200000/-???

If yes please mention that under witch section too please sir

Thank Alot alot sir

CA KARAN SINGH (Auditor at Big 4) (622 Points)
Replied 15 August 2020

Dear Madhu Ji, I said receipt should be less than Rs. 200000, even you can not receive exactly Twe lakhs rupees. (Refer Section 269ST of Income Tax Act, 1961)

On the other hand, I mentioned Business expenditure should not be more than Rs. 10000 in a day from a single party. So you cannot purchase goods for more than Rs. 10000 in cash in a single day. (Refer Section 40A(3) of the Income Tax Act.

In the first case, the Income Tax Act imposes a penalty on the receiver, not on the person paying Rs. 200000 or more in cash. It means if you received cash Rs. 200000 or more, you will be liable to a penalty, not the payer.

In the second case, there is no penalty if you purchase goods worth more than Rs. 10000 in cash in a single day from a single party, but the Income Tax Act will not allow that expenditure as business expenditure.