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Limit on cash purchase

1883 views 4 replies

Arunachalam

Proprietor

191 Points Joined June 2018

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)

Pratik Surve

Assistant Professor

571 Points Joined September 2017

CASH PURCHASE IS ALLOWED UPTO RS 200000 AS PER IT ACT

Preksha Bhatt

CA.Student

290 Points Joined January 2017

No , cash purchase 10000 is applicable

Pratik Surve

Assistant Professor

571 Points Joined September 2017

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.

Arunachalam

Proprietor

191 Points Joined June 2018

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.