cash payments more than 20000

This query is : Resolved

Hashim (Querist)
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10 December 2009 What is the exact law for " cash payments of more then 20000"

Is it aggregation (sum up) per day per person

Or,

Is it per person per year

Example:

If I purchase goods of Rs. 100000 from Mr. X,

(1)
Can I pay cash 20000 x 5 = 100000
in different dates of the same financial year to Mr. X.

Or

(2)
I can pay only Rs. 20000 Cash in the same financial year to Mr. X. and rest by cheques.

Please guide

CA Balram Sharma

CA Balram Sharma (Expert)
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10 December 2009 section 40A(3) is applicable in this regard,

this section will aplicable when more than 20000 to a person in a sigle day.

the whole amount will be disallowed,

CONDITION IS

FOR SINGLE PERSON IN A DAY,

CA Balram Sharma

CA Balram Sharma (Expert)
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10 December 2009 EX,
SUPPOSE YOU PAY RUPEES 25000 TO A ON 10-12-2009.
THN WHOLE AMOUNT WILL BE DISALLOWED,

IF YOU PAY
15000 AS ON 10-12-2009
AND 10000 AS ON 15-12-2009

IN THIS CASE RS 25000 WILL BE ALLOWED

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