Cash transaction limit in Income Tax

Cash transaction limit in Income Tax In this financial year, some cash expenses limit has been imposed and changed some of them are listed below: Camp

Cash transaction limit in Income Tax

In this financial year, some cash expenses limit has been imposed and changed some of them are listed below: Campaign Say no To cash / Know when to say NO to cash transaction
Be careful during the current financial year as per the last income tax act amendment if you crosses the limits of these cash transaction limit then you have to bear up to 100% penalty or disallowance of expenditure and disallowance of deduction under Chapter VI.

1. You can not accept cash exceeding Rs.2 Lakh in aggregate in a year in a day for one occasion, for one event or, in one transaction.
   If you do, you will have to pay 100% of the amount involved as a penalty of u/s 271DA.
   
2. Payment of any expenditure exceeding Rs. 10,000 in a Day is not allowed to be deducted from business or professional income u/s 40A(3).
3. Payments to transport operators for plying, hiring or leasing of goods above Rs.35,000 are not allowed to be deducted from business or professional income u/s 40A(3).
   
4. You cannot receive any loan or deposit of more than Rs.20,000 in cash. This is as per section 269SS. If you accept, the penalty is 100% of the loan or deposit taken.
   
5. If you received any loan or deposit, you can not pay back the amount of the loan or deposit in cash. This is as per section 269T. In case of default, a penalty f 100% of the amount involved as per section 271E.
   
6. Section 269SS prohibits the acceptance of advances in excess of Rs. 20,000 in a year for the transfer of immovable property. If you accept, the penalty is 100% of the amount involved.
   
7. As per section 43(1) payment above 10,000 for the purchase of business assets can not be done in cash. If done, then the amount will be reduced from the cost of the asset. That will reduce your claim of depreciation on assets.
   
8. Investment-linked deduction for capital expenditure can not be done in cash in excess of Rs.10,000. If you do, a deduction u/s 35AD will not be allowed.
   
9. Section 80D provides a deduction for buying medical insurance. However, if you pay the premium in cash, the deduction can not be claimed.
   
10. Political parties can not accept donations in excess of Rs.2,000 in cash as per section 13A of the Income Tax Act.
    
11. If anyone donates to funds or trusts approved for section 80G, then a donation in cash can not be more than Rs.2,000. If you donate more than Rs.2,000 in cash, you can not claim a deduction u/s 80G
    
12. Donations for research and rural development for deduction u/s 80GGA can not be in cash exceeding Rs. 2,000.
    
13. Companies can not claim a deduction u/s 80GGB for donations to political parties if they donate in cash.
    
14. Individuals and others can not claim a deduction u/s 80GGC for donations to political parties in cash.