Ad Free CAclubindia and Daily Updates on your Mobile. Subscribe Now!

Cash Balance

Rangarajan (CA Student) (200 Points)

08 July 2008

Hi Every one

When finalising a statement, is there any restriction on cash balance.

Regards

Rangarajan.K

Reply
Follow
Share

4 Replies

Bala (CA Practice ) (63 Points)
Replied 09 July 2008

If the assessee is subject to wealth tax, he may have to pay 1% if the cash balance exceeds Rs.50,000/-.Otherwise I don' see any problem. Only thing one should be able to explain the sources of such cash balance.

Upgrade to CAclubindia Pro. Subscribe Now!

Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 09 July 2008

no restriction from RBI

no restriction under the Income Tax Act

under the Income Tax Act you may be required to explain the source of cash

P. BASKAR (TAX CONSULTANT) (66 Points)
Replied 09 July 2008

No specific rules for maintaining the cash balance. It is depend up on the size of business and needed for business day to day transaction. But as per the Income tax section 40(A) payment made above 20,000/- through the cheque only.