Legal or illegal

whether cash transaction for buisness is illegal in the eyes of income tax law??
Replies (15)

Here it is not a matter of illegal or legal because it is allowed under companies act 1956 as an expenditure.Generally a matter which is legal is not illegal in any other act.and the theme is just to track all high value transcations so that no one can escape from tax liability

What is in the act 1956..plz tell
R u talking abt 20,000 allowable cash exp. Which are revenue in nature

Refer to section 40 and 68 of IT Act.

its not legal or illegal question 

it is just question of allowablity in calculating taxable income

I am only talking about legal or illegal sir....i alao knw its a matter of calcultion...but i m just asking that whether it is said to be illegal if there is cash transactions....or not

First you understand the meaning of legal and illegal. Legal means as per the law and illigal means against the law in simple words.  cash transactions are not illegal upto the extent which is not prohibited by any law.   If it is prohibited or regulated then beyond that level it is illegal.

So u mean ki above 20,000 exp of revenue nature are illegal..right na

are dude don t take tension. hamare politicin bhi cash transaction hi karte he......to ham kare usme konsi galat bat he.

Are boss..mai q tension lunga..mai to bas clr krna chahta tha

its not illegal 

but this is only to reduce tax evasion 

any cash trasantion in bussines above Rs. 20000.00 in  income tax law is illegal

Any illegal transactions are disallowed, but transactions which are disallowed are not illegal. Illegal is a very strong word in Income tax. That section has been inserted only to curb tax evasion. There are plenty of cases where a transaction is disallowed but after the assessee goes for appeal, the disallowance is then lifted.

it is legal. but  if d transaction value is over 20000 deduction is not allowed.........

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