11/10/2023
IT dept has circulated an e-flyer explaining cash transaction limits.
1. Taking/ accepting loans/ deposits: Not allowed to accept > Rs. 20K in cash, with certain exceptions.
2. Repayment of loans/ deposits: Not allowed to repay > Rs. 20K in cash, with certain exceptions.
3. Other cash transaction: Not allowed for an individual to receive > Rs. 2 lakhs in cash from a person in a day, or in a single transaction, or transactions relating to 1 event or occasion from a person.
4. Health insurance premium payments made in cash – not eligible for dedn u/s 80D.
5. Disallowance of cash expenses: If any business or professional expenditure paid in cash in a day > Rs. 10K, full amt - disallowed.
6. Cash donations: Cash donations exceeding Rs. 2,000 made to a registered trust or political party – not eligible for deduction u/s 80G.
7. If a liability incurred for certain expense has been allowed, but following year, such payment is made in cash, to a single person in a single day exceeding Rs. 10,000, such payment will be subject to income tax as income for subsequent year.
8. Disallowance for capital expenditure: Cash payment made in respect of acquisition of fixed asset to a person in a day, exceeds Rs. 10,000, such expenditure not to be considered while determining the actual cost of the asset.
