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Cash Purchase
I have purchase goods in cash worth Rs. 25,000. Can I make a single cash payment of Rs. 25,000 for this one transaction ?
Replies (2)
As per Section 40A(3) of the income tax act, you cannot make cash payment exceeding Rs.10,000 per day to a single person. You should pay cash to him on 3 different days. Best way is to make payment via bank if you want to pay him on a single day.
If it is non-business goods purchase, it is ok. No issue. if it is business purchase then avoid cash purchase
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