30-Nov-2020 Part -1 "SAY NO” TO CASH TRANSACTIONS
In ancient times, barter exchange was prevalent for transacting the business. Money or currency got evolved and prevailed over barter exchange. Evolution of currency, no doubt has eased the transactions but has come with its own problems
"SAY NO” TO CASH TRANSACTIONS
APPLICABILITY OF TAX AUDIT
SR. NO. | SECTION | PURPOSE & LIMIT | NEW LIMIT |
1 | Sec 44AB | Applicability of Tax Audit - For Business – if Gross receipts / turnover > Rs.1 Crore - for Professional if Gross receipts / turnover > Rs.50 Lakhs | - For Business - Gross receipts / turnover > Rs. 1 Crore but < Rs. 5 Crore. Provided Cash receipt and payment is limited to 5 % of gross receipt or gross payments respectively. |
DISALLOWANCE OF CASH TRANSACTIONS FOR THE PURPOSE OF CLAIMING DEDCUTIONS FROM INCOME & ASSETS
SR. NO. | SECTION | DISALLOWANCE | DISALLOWNACE LIMIT | ELIGIBLE MODE OF PAYMENT | EXCEPTION |
1 | Sec 35AD | Disallowance of capital expenditure | >Rs.10,000 per person per day | Deduction allowed if Payment made by Account Payee Cheque / Draft / ECS or specified electronic modes | None |
2 | Sec 40A(3) | Any Capital or Revenue Payment allowed as deduction u/s 30 to 37 | > Rs.10,000 per person per day per bill | Same as Sec 35AD | Rule 6DD |
3 | Sec 40(3A) | Any Capital or Revenue Payment allowed as deduction u/s 30 to 37 | > Rs.35,000 for transporter payments | Same as Sec 35AD | Rule 6DD |
4 | Sec 43(1) | Cost of Assets | > Rs. 10000 for purchase of asset | Same as Sec 35AD | None |
DISALLOWANCE OF CASH TRANSACTIONS FOR DEDUCTIONS FROM GROSS TOTAL INCOME
SR. NO | SECTION | NATURE OF TRANSACTION | DISALLOWNACE LIMIT | MODE OF PAYMENT | EXCEPTION |
1 | Sec 80G | Donations | > Rs.2,000 | Otherwise than by cash | None |
2 | Sec 80GGB/ Sec 80GGC | Contribution by Indian Company to Political Party or Electoral Trust | > 0 | Otherwise than by cash | None |
3 | Sec 80D | - Health Insurance Premium - Preventive Health Check up | > Rs.10,000 > Rs.5,000 | Otherwise than by cash | None |