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Cash payment and receipts limit

ghanshyam lohar (30 Points)

24 August 2018

KINDLY SHARE LIMIT OF CASH PAYMENT AND RECEIPT FOR VARIOUS business transactions.?

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RAJA P M ("Do the Right Thing...!!!") (127511 Points)
Replied 25 August 2018

Cash Transaction restricted Assessee to Asseessee in single day and it's limit...

Payment Rs 10k per day...
- If Payments above 10k it's disallowed in income tax.

Receipts Rs 199999 per day...
- If Receipts exceeds Two Lakhs then Penalty will be Payable 100%

1 Like

CA P V N Varma (CA ) (609 Points)
Replied 25 August 2018

Kindly refer Sec 40A(3) for Cash payments and sec 269ST for Cash Receipts

Shivam RC (Student) (23683 Points)
Replied 25 August 2018

Agree with Varma Sir..

Tatavarty Prakasarao (132 Points)
Replied 25 August 2018

199999 iz per day or hole rear pl clarify

ghanshyam lohar (30 Points)
Replied 25 August 2018

can an individual pay cash 1.99 lakh to a trader in single day for purchase something.

Shivam RC (Student) (23683 Points)
Replied 25 August 2018

As per SECTION 269ST of the Income Tax Act 1961, the limit of ₹ 1,99,999 is per day not per year.

Yes, an individual can pay ₹ 1,99,999 cash to a trader in a single day, but the person will not be allowed to claim deduction of the same in the Profit and Loss Account i.e. the amount cannot be debited as payment exceeds ₹10,000 in Cash.

As per the provision of SECTION 40A(3) of the Income Tax Act of 1961, a person cannot make payment in CASH exceeding ₹10,000 per day ( ₹35000 per day for Transportation business).

Hence, it is advisable not to make payment in CASH exceeding ₹ 10,000 in CASH.