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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