About cash payments

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 February 2013 sir,
A trader purchases goods worth about 50000 and make immediate payment in cash it can be written in single transaction or more than one.

Rashid Mehmood

Rashid Mehmood (Expert)
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21 February 2013 It is better to record individual transaction because income tax law doest permit cash payment more than a certain limit. if the cash payment is exceeding that limit you need to break the amounts into individual payments to avoid the tax complication.

secondly you should keep in mind that if purchases are made from single party, then there is also a maximum limit where you can pay in cash and if the amount exceeds that limit you have to use banking channel otherwise the expenses will not be admissible.