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Income Tax Provisions for Cash Transactions:


Deposit

1. Quote PAN for cash deposits more than 50,000 

 2. Cash deposit more than equal to 50 Lakhs in current account and more than equal to 10 Lakhs in FD or Savings A/C gets directly reported by Bank. So, Proper accounting required for such deposits.

Withdrawal 

1. TDS of 2% gets deducted by Bank for withdrawal above 1 Cr. ( TDS receivable entry to be done 

Expenses

1. No Expense/asset above 10,000 can be done in a day per per person in cash/cross cheque 

2. ⁠No Expenses above  35000 can be done in a day per person for Transporter in cash/cross cheque 

Sales

1. Sale can not be done more than 2 L in a day/per transaction/per person. If tax audit applicable , reporting is done by auditor if sale more than 2 L is being made

loan/deposit/Advance for immovable property:

1. Loan / Advance for immovable property of  20,000 or more can not be accepted

2. ⁠loan/ advance for immovable property of 20000 or more can not repaid via cash. However , single installment can be upto 20,000 in cash. 


Tax audit

1. If cash receipt /payment is upto 5% of total receipt/payment then Tax audit applicable only over 10 Crore sale. So , avoid accepting tax to avoid tax audit

Capital Introduction in cash:

Grey area. Strictly : Allowed upto 2 L per transaction per day per person

Drawing in cash

 Grey area. Strictly , Allowed upto 2 L per transaction per day per person 

Reimbursement

Limit of 10000 applies here too 

Gift from relative in cash

Upto 2 L per transaction per day per occasion 

Loan or repayment to Partner/ by partner in cash:

Upto 20,000 only

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