Cash Transaction between individuals

Yes, Payment can be made in excess of 20000/- in cash and even  can claim HRA no restriction for individual salaried person for payment his expenditure in cash more than 20000/-

Mr Ganeshi

For HRA exemption not to be required rent to be paid in cheque only, so he can claim

but in Rent receipt PAN NO. of owner must be wtittren in correct otherwise u have to punished

second things Rent Agreement must be created and sign both the parties

then u have to paid any money as rent in cash no any objection b y ITO and employer

Dear Ganeshi

Sec.40A lays down the conditions on the basis of which expenses or payments are not deductible in certain circumstances. It is applicable only case of computation of income under the head PGBP.

Hence in your case my views are under:

1) Rent payment > 20K would be allowable for HRA exemption as 40A is not applicable to Salary income.

2) HRA exemption would be allowable (supra)

Dear All,

Thank you very much for your very quick response.

One more query in this regard please:

Can this foreign employee at his arrival to India first time take personal cash from a freind or so to meet out his initial requirement like - payment of advance rental, security deposit with landlord etc. as he will get his salary after a month from the employer and also at the moment he does not have any bank account. Also he does not carry the foreign currency.

Looking forward for assistace in the matter.

Ganeshi Lal Agarwal

Sec 269SS prohibits a person from taking loan or deposit of an amount exceeding Rs.20K.

Remedy in your case is to let the foreign resident  open a bank account . You may issue him a cheque as loan.

hi according to Me

Sec.40A lays down the conditions on the basis of which expenses or payments are not deductible in certain circumstances. It is applicable only case of computation of income under the head PGBP.

 Therfore in your case my views are under:

1) Rent payment > 20K would be allowable for HRA exemption as 40A is not applicable to Salary income.

and

2) HRA exemption would be allowable

here i want to say something that 

if you are salaried person and nothing having any business income 

rarely i had seems those person who has both income from salary and as well as business

now when you want to get HRA exemption then their is no problem that you are paying rent for your personal purpose and not for business purpose 

you can get HRA exemption at all 

and it's not allowed to deduct rent from business income because it's your personal income and if you are paid from you business expenses then it will deduct through you capital then the profit and loss a/c will not allow 

finally there is no certain issue for disallow your amount paid is exceeding rs 20,000

in this query 

if i'm wrong the correct me 

no relation what so ever with 40 A and salary head , hence no restrictions on payment on house rent in cash