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Cash Sale limit in FY 2017-2018

NITIN SABOO (344 Points)

08 October 2017

Can we issue cash Sale invoice above 10000 to single person and what is maximum cash Sale limit against one invoice.

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20 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (183108 Points)
Replied 08 October 2017

Yes, You can issue cash bill upto 2 lakhs limit (single or in aggregate), per day per person, provided the purchaser is not a trader.......

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NITIN SABOO (344 Points)
Replied 08 October 2017

Sir, thanks for advice. If person is trader than what will be the limit in Cash invoice. Plz suggest

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (183108 Points)
Replied 08 October 2017

Limit for any businessman to purchase in cash is upto Rs. 10,000/- per bill. (as per section 40A(3) of IT act).

In case, purchaser insists for cash purchase, you can sell upto 2 lakhs in cash.

NITIN SABOO (344 Points)
Replied 08 October 2017

Thanks sir

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (183108 Points)
Replied 08 October 2017

Welcome.....

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NITIN SABOO (344 Points)
Replied 08 October 2017

Than what will be problem for purchaser

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (183108 Points)
Replied 08 October 2017

Unless he declares his income under section 44AD, the cash expenses/purchases above Rs. 10,000/- per day are disallowed thus the amount is added back in his profits and taxed accordingly.

RAJA P M ("Do the Right Thing...!!!") (128096 Points)
Replied 08 October 2017

Dear Sir.,

In case a bill is Rs. 50000. Cash received Rs. 10000 * 5days.

This condition the above said rule applicable or not...?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (183108 Points)
Replied 08 October 2017

It will be disallowed.......... as single event......

RAJA P M ("Do the Right Thing...!!!") (128096 Points)
Replied 08 October 2017

But,
Many more traders are dealing cash sales...!

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (183108 Points)
Replied 08 October 2017

Under GST no such rules......

Under IT Act......... the limit recently reduced to 10K from earlier 20K........

Under section 44AD......... no such rules applicable........ assessment based on turnover only......

Others unaware of any such rules....... escape its applicability, only untill file opened under scrutiny!!!

RAJA P M ("Do the Right Thing...!!!") (128096 Points)
Replied 08 October 2017

Sir...
Thank you Sir...
If it's disallowed by Auditor then no more problems...
But, without disallowing what are penalties for maximum and minimum....?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (183108 Points)
Replied 08 October 2017

Auditor cannot escape such rules.

Under the section...... the expenses are disallowed by ITO and the amount is added back to P&L account....... thus taxed additionally with interest, but not penalized otherwise....