Receipt of amount in excess of rs. 20000/- in cash.

Others 4977 views 8 replies

Bharat

Others

25 Points Joined March 2013

Hi ! Greetings to everyone !!!

I work for a construction company and am involved in selling residential flats. In my current position I have come accross a situation where one of our customers has paid about Rs. 2,00,000/- in cash towards payment of his flat and we have issued him a valid receipt and we have deposited the same in our bank.

I have read somewhere that any amount paid in excess of Rs. 20,000/- attract some penalty. I tried searching this forum for my query and I came across many answers but I could not connect any of them to my query.

I would like to know the Income tax/penalty implication with respect to receipt in cash in excess of Rs. 20000/- for us as a company and for our customer who has made such payment.

Thanks & regards,

Bharat

Replies (8)

CA Raj Doshi

Practising CA

8944 Points Joined December 2013

No penalty for receipt. Payment exceeding 20000 is disallowed i.e not treaties as expense under income tax act. Further such disallowance is not applicable if payment is towards capital expenditure.( purchase of asset )

ROSHAN PAUL JOSEPH

CA Final student

311 Points Joined December 2010

Originally posted by : Raj C Doshi
	No penalty for receipt. Payment exceeding 20000 is disallowed i.e not treaties as expense under income tax act. Further such disallowance is not applicable if payment is towards capital expenditure.( purchase of asset )

refer Sec 40 (3) of Income tax Act for further clarification

dhanindra kumar surana

consultancy

27 Points Joined July 2008

Also refer budget 2015 proposals for Sec 269SS / T

CA Hemant KUMAR

professional

37 Points Joined September 2009

There is no such penalty on receipt what income tax says is that any amount reived in excess of Rs. 20000 will be treated as your income irrespective of nature of receipt that is even if you have took loan in cash in excess of Rs. 20000 it will be treated as Income however as one of your clients who gave you advance for the flat is already in nature of your income so there is no impact on such receipt

Bharat

Others

25 Points Joined March 2013

Originally posted by : CA Hemant KUMAR
	There is no such penalty on receipt what income tax says is that any amount reived in excess of Rs. 20000 will be treated as your income irrespective of nature of receipt that is even if you have took loan in cash in excess of Rs. 20000 it will be treated as Income however as one of your clients who gave you advance for the flat is already in nature of your income so there is no impact on such receipt

Sir,

Thanks for your prompt response. Would you kindly tell me the implication in terms of punishment/penalty to the buyer. How will the IT treat this transaction as far as the buyer is concerned.

Thanks in advance,

Bharat

CA Vijay Jain

Chartered Accountant

176 Points Joined January 2010

Penalty u/s 269ss will be levied for an amount equals to the sum taken in cash exceeding rs 20000/- for sale of immovable property on or after 01.04.2015

CA Vijay Jain

Chartered Accountant

176 Points Joined January 2010

In order to curb generation of black money by way of dealings in cash in immovable property transactions, section 269SS is proposed to be amended so as to provide that no person shall accept from any person, any loan or deposit or any sum of money, whether as advance or otherwise, in relation to transfer of an immovable property otherwise than by an account payee cheque or account payee bank draft or by electronic clearing system through a bank account, if the amount of such loan or deposit or such specified sum is twenty thousand rupees or more.

KIRTI

Accounting

29 Points Joined April 2015

Hello Vijay sir My claint sale of engine some rs.120000/- and him customer paid advance rs.50000/- or 100000/- So, how can give the receipt? rs.20000/- or 50000/-? Please reply me Sir.