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