Quick Summary
The Draft Income Tax Rules, 2026 have introduced Rule 26, detailing specific cases where payments exceeding Rs 10,000 in a day made otherwise than through specified banking or prescribed electronic modes, will not trigger disallowance under Sections 36(4) and 36(5) of the Income Tax Act. The provis
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FAQ :
Rule 26 outlines specific circumstances where cash payments exceeding £10,000, made through non-specified banking or electronic modes, will not be disallowed as business expenditure under the Income Tax Act.
Yes, cash payments exceeding £10,000 are permitted when made to entities like the Reserve Bank of India, banking companies, co-operative banks, and life insurance corporations.
Yes, payments over £10,000 to cultivators, growers, or producers for agricultural, forest, animal husbandry, fish, or horticulture products are exempt from disallowance.
Cash salary payments are allowed if Tax Deducted at Source (TDS) is made, the employee is temporarily posted away from their usual duty station for 15 days or more, and they don't have a bank account locally.
Yes, terminal benefit payments to an employee or their heir for retirement, retrenchment, resignation, discharge, or death are allowed if the aggregate amount does not exceed £50,000.
Payments made in cash in a village or town without banking facilities on the payment date, to a person residing or doing business there, are exempt from disallowance.
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