Cash withdrawal

1. Cash payment not to exceed Rs.20,000 in a day (in case of plying/hiring/leasing trasnport vehicles Rs.35,000). If it exceeds, then whole amount would be disallowed.
2. If payments are made to labourers for labour work, then voucher would suffice, in any other case, invoice is needed.
3. Also, if payment exceeds limits specified (for relevant sections on TDS) then tax to be deducted at source. Also PAN is required. If no PAN, then rate of TDS would be higher.

Thanks..Does it mean we can draw cash to the extent of Rs 5 lacs per month with supporting vouchers ?

Thanks..Does it mean we can draw cash to the extent of Rs 5 lacs per month with supporting vouchers ? (Rs 20000 per day X 25 working days)

I guess yes. The more the volume of such transactions, the more the chances of scrutiny. As long as proper documents are maintained, there might not be any issues. Also please ensure the provisions of TDS are met.

Assuming that your service providers have bank accounts, If it is possible to make direct bank transfers or cheque payments it would be prudent than paying cash.