dear sir, my client as running firm, the capital introduce by 3 partner by cash RS.90000. my question was capital contribution by cash is violation or not?
it is permissible by cash ?
4 Replies
Giridhar S Karandikar
(Team Lead)
(7548 Points)
Replied 15 August 2019
not an issue, but you need to keep adequate documentation if the volume is high if capital introduction through cash in order to substantiate it to tax authorities
mansi r sharma
(student)
(67 Points)
Replied 16 August 2019
No partner can withdraw or introduce capital more than or equal to Rs 2,00,000 in cash the firm Otherwise will attract penalty us sec 271 DA
Suresh Thiyagarajan
(Student)
(3986 Points)
Replied 17 August 2019
1. The only section which stands in way of contributing in cash by the partners as capital is sec 269ST.
2. Sec 269ST says that cash transaction per day to a person cannot exceed Rs.2 lakhs. If cash transaction was undertaken in excess of Rs. 2 lakhs per day then penalty equal to the amount of such transaction will be levied u/s 271DA.
3. Sec 269ST is a general section and irrespective of the nature of the entity and tranaction if it had exceeded Rs. 2 in a day in cash this provision will come into operation. So the introduction of capital by partners will also be covered under this section.
4. However, in the above transaction cash amount had not exceeded Rs. 2 lakhs hence sec 269ST will not come into operation.
5. To answer your question there will not be any violations with respect to the introduction of capital by 3 partners by cash.
Please correct me if the above solution has an alternative view.
Recent Topics
- INCOME TAX AY 25-26
- Experienced CA firm for accounting & auditing
- Regarding Perquisite Tax on ESOP - Unlisted Compan
- Casual Taxable Person under GST
- Extended Date of GSTR-1 for the month of July 2020
- NRO Interest - Taxed at source and in Foreign Coun
- Clarity needed on effective date
- Income Tax Refund Deadline Shortened to Five Years
- Rectification Applications for Past GST Demands
- GST Invoices Series
Related Threads
CAclubindia
