As per IT law, its said that a person can receive less than Rs. 2.00 from each person in a day in cash but more than that will invite penalty as per IT law. Now I have a confusion that as per amended IT law, a person cannot pay more than Rs 10000 per day in cash to each person. Isnt this contradictory? Please clarify?
No, it's not contradictory... If Person received Rs. 2,00,000 or more in cash than there is penalty of 100% of amount received by them.. Penalty is on person who received Cash, not on who paid and this provision is applicable to all.. business as well as non business transaction.
Second, if any Person Paid more than 10,000 in cash than there is no penalty, but that payment is not allowed as Expenses in business. (it's not deductible for calculation of profit if paid in cash more than 10,000) So, this is also if relating to Business transaction only, ..not applicable to non business transaction...
e.g You can Purchase old car for personal purposes in Rs. 1,50,000/- You can paid this in cash because it's not business transaction and opposite party can receive cash because it's below 2,00,000.
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