Cash deposit in huge amount

Page no : 2

Atul Deep Gupta (AGM) (30 Points)
Replied 02 April 2013

their is nothing secretive. u can withdraw and deposit as much as you can . But if it is an individual account and routing entries in cash of more than 10 lakh alerts Anti money laundring cell . If it is a company then only bank ask you about the source and disposal as a routine compliance and it will seldom being questioned by ITO because in routine business drawing and depositing cash is a normal thing. But to make you alert i wish to advise that for cash txn u must keep all vouchers with you because now a days black money being converted to white money therefore AML cell is very active. There is nothing to worry if you keep all supportives with you.. all the best . Atul Deep Gupta ,CMA and Banker

Avinash Kumar (CA Final Student & Working as Deputy Manager Accounts) (79 Points)
Replied 02 April 2013

Hello ! Every one.

What I think there is no problem in the explained case but if company/firm has an C/C account and paying interest on that in that case AO may ask to reverse the interest provided in p&l account. Beacause you are paying one side interest on borrowed fund and other side maintaining hues cash balance is not justifiable. It seems you have used fund for personal benifit of directors etc. But if you have sound justification about the requirement/withdrawl of cash just not to be worry. As you know you have hues time to think about the justification.

Regards

CA Kumar Mukesh (CA CMA FINAL and Advance Excel Trainer) (6876 Points)
Replied 02 April 2013

Originally posted by : Nisha Yadav
	Dear All gud evening, I m working with a pvt ltd compayny. I have witdrwal 10 lac on 10 march'13 and now i want to depostit same amount date 2 April 13.. Now let me know is there any problem to deposit same amount after 20 days. and second thing is any limit for cash in hand on 31st march? Thanks to all

One more option is also available to you, instead of depositing LUMP-SUM amt of Rs. 10 lacs its advisable to you depisit the same in installment with atleast 15 days time period. By using this technique you might never be covered in huge cash transaction RADAR maintained by Revenue Department.

Hope it helps you lots

Atul Deep Gupta (AGM) (30 Points)
Replied 02 April 2013

1) there is no limit to keep cash in hand as on 31st march 2013 provided you show the same in your audited Balance sheet. 2) there is no worry if you have supportives with you . you need to convince the AO at time of query , if any( which is remotely possible in case of companies for such a sum) . Normaly what people do , they withdraw huge amounts to understate profits and evade subsequent tax implications and redeposit amount in new FY as a fresh capital or unsecured loan. Or companies do striping through routing cash txn between various companies having same controlling mgmt. In your case nothing seems like that . so there is no worry. you may keep this cash with you and redeposit as and when you require provided these transactions are properly shown in you financial statements. Atul Gupta,CMA

Manoj Agarwal (Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com) (3456 Points)
Replied 04 April 2013

I agree with Atul Gupta Ji...

If you are referring to your savings accounts, then cash depsit exceeding Rs. 10 Lacs during a financial year is reported by the bank in Annual Information Report and the IT Authorites enquire about the same. In case of company, you need not worry, be happy :-)

Mihir (Wealth Manager) (5293 Points)
Replied 05 April 2013

Annual Information Report prepared by the bank stating this transaction will go to the AO. So be prepared the evidence to show that this is not an unexplained cash deposit.