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Cash transcations in group companies

Ghanshyam Lohar (ACCOUNTANT) (60 Points)

17 October 2019

KINDLY CONFIRM CASH TRANSCATION LIMIT PER DAY IN GROUP COMPANIES?

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3 Replies

rama krishnan (12239 Points)
Replied 17 October 2019

There's no separate threshold limit for transactions among group companies

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CA Dhruva Kalamanji (Chartered Accountant ) (1996 Points)
Replied 17 October 2019

Hi Ganashyama

there is no direct limit as such. it depending upon nature of transaction. if it is expenses related then 10k . if loan kind then different limit

Thank you
You can also write to me at sthayin @ gmail for further assistance

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Suresh Thiyagarajan (Student) (3986 Points)
Replied 17 October 2019

1. In the case of cash payments, the maximum amount allowed in a day to a single person is Rs. 10,000. Anything above this amount will be subject to disallowance u/s 40A(3). This is applicable to all types of payments. Even applies when payment is made to group companies.
2. As per sec 269ST, in case of cash receipt from a single person in a day for a single transaction, the limit is Rs. 2 lakhs. Irrespective of whether the same is received from group companies.
3. In case of acceptance of loans or advance or any other sum in cash in a day from the same person, it should not exceed Rs. 20,000. This is dealt in sec 269SS and this also applies to all types of transactions in cash.
4. As per sec 269T, in case of repayment of loan or advance in cash the same Rs. 20,000 limit is applicable for all kinds of transactions.
5. There is no separate privilege for cash transactions with respect to group companies.
Please correct me if the above solution has an alternative view.

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