Chirayu Saraswat

Chirayu SaraswatFinance Act, 2017, preceded by demonetization, has proved to be a night-mare for businesspersons especially those of Tiny and SME Sector. Now, there are a number of disincentives in shape of taxes alongwith penalties, which have to be known by every businessman and layman while conducting day to day cash dealings. Author has tried to sum-up such transactions as a recipient and as payer:

a) When you are a payer/depositor of cash:

i) Do no pay exceeding 10000/- per day per person for any business payment either for any expense or purchase of capital asset (except transport expenses where the limit is Rs. 35000/-)

ii) Report deposit of the cash in bank (if aggregate cash deposits during the period is Rs 2 Lacs or more during 09.11.2016 to 30.12.2016 ) in the Income Tax Return for AY 2017-18,

iii) If you are company, then report the following details in company’s notes on accounts:

SBNs

(Old 500 and 1000)

Other denomination notes Total
Closing cash in hand as on 08.11.2016
(+) Permitted receipts
(-) Permitted payments
(-) Amount deposited in Banks
Closing cash in hand as on 30.12.2016

iv) Do not pay Donation in cash exceeding Rs. 2000/- if you wish to claim deduction u/s 80G

v) Do not pay premium for mediclaim in cash to claim deduction u/s 80D

vi) Do not repay any loan or deposit in cash in excess of Rs. 20000/- or more

b) When you are a receiver of cash:

i) Do not receive 200000/- or more in following situations:

a) Aggregate receipt from a person in a day

b) Aggregate receipt in respect of a single transaction

c) Receipt of in relation to one event or occasion from a person

ii) Do not accept loan or deposit or sale consideration of immovable assets in cash in excess of Rs. 20000/- or more

iii) If you are a hotel/restaurant, do not accept cash in excess of Rs. 50000/- against a single bill or several bills without obtaining PAN or form 60.

iv) If you are a tour operator for foreign country /money changer, do not accept cash in excess of Rs. 50000/- at any time without obtaining PAN or form 60.

v) Do report aggregate cash receipts exceeding Rs. 200000/- in return form 61A if the transaction value is more than Rs. 200000/- and you are audit case u/s 44AB.

(Author is CA Final Student)

More Under Income Tax

Posted Under

Category : Income Tax (24916)
Type : Articles (13975) Featured (4135)
Tags : black money (674) Demonetization (455)

6 responses to “Handle Cash With Special Tax Care”

  1. CA SATISH NEMANI says:

    Question: If I sold tractor 500000 lakh and rec cash 190000 and other amount received by RTGS .Is right or wrong by new rules.pleas answer.
    Answer: Yes, you can do

  2. CA SATISH NEMANI says:

    Question: During 2016-17 several times cash was drawn from BANK & after spending can I remit back the Balance cash available on hand even if it is more than 200000. Please note the drwal was made from the OCC Account of the Bank & not Got from outside.
    Answer: Yes

  3. Asha Kanta Sharma says:

    Cash is the root of all evils in the society. Good initiatives by Govt. of India.

  4. T Sampath says:

    Dear Sir

    During 2016-17 several times cash was drawn from BANK & after spending can I remit back the Balance cash available on hand even if it is more than 200000. Please note the drwal was made from the OCC Account of the Bank & not Got from outside Source

  5. Atul says:

    If I sold tractor 500000 lakh and rec cash 190000 and other amount received by RTGS .Is right or wrong by new rules.pleas answer

  6. S.S. says:

    I think its been a nightmare to those whose revenue’s transactions are not in a transparency vision to the government… Actually it’s the overall country’s growth which this act want to accomplish and not of those personal intrest…i agree that per capita income is in a great need to hiked up..and many other factors …but the act are meant to see the rise in the growth capacity of a nation and its welfare…😉😎

Leave a Reply

Your email address will not be published. Required fields are marked *