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CASH EXEMPTION LIMIT

Krishna Chaudhary (6 Points)

03 December 2020

what is exemption limit for taking cash payment from any client under Income tax act for the F.Y.2017-18

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rama krishnan (12234 Points)
Replied 04 December 2020

Limit depends upon the nature of receipt

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Shivam RC (Student) (23683 Points)
Replied 05 December 2020

1). CASH PAYMENTS :

As per the Provision of Section 40A(3) of the Income Tax Act 1961, A person can pay a maximum of Rs. 10,000 per day to per person in "CASH". If the Cash payment exceeds Rs. 10,000 in a day, then you will not be allowed to claim deduction of that particular expenditure in your P&L A/c [ PROFITS AND GAINS FROM BUSINESS OR PROFESSION HEAD ]. There is no Year limit. The limit prescribed under the Law is "per day."

2). CASH RECEIPTS :

As per the Provision of Section 269ST of the Income Tax Act 1961, No person shall receive an amount of "Two lakh rupees" or more :

(a). in aggregate from a person in a day; or

(b). in respect of a single transaction; or

(c). in respect of transactions relating to one event or occasion from a person,

otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account.

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