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Limit on cash purchase
While a buyer is allowed to purchase only for 10,000 in cash per day from a person, how come allowing a seller to collect up to 1,99,999 from a buyer in a single day become possible? Just curious to know your thoughts.
Replies (4)
CASH PURCHASE IS ALLOWED UPTO RS 200000 AS PER IT ACT
No , cash purchase 10000 is applicable
PLZ READ THIS
Section 269ST of Income Tax Act
Section 269ST of Income Tax Act provides that no person can receive an amount of INR 2 Lakhs or more in cash:
- In aggregate from a person in a day;
- In respect of a single transaction; or
- In respect of transactions relating to one event or occasion from a person.
Provisions of Section 269ST are not applicable, when cash of more than Rs.2 lakhs is received from following person:
- Government;
- Any banking company, post office saving bank or co-operative bank;
- Institution, association or body or class of institutions, associations or bodies notified by Central Government in its official gazette.
Thanks Pratik 😊. Just misunderstood 40A(3), wherein the 10,000 limit per day is applicable only for business expenditure and not for purchase of salable goods. Hope, this would clarify others too.
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