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Cash transactions have long been a subject of scrutiny by the Indian Income Tax Department due to their potential for tax evasion and unaccounted money circulation. It is important for taxpayers to know these limits in order to make sure their expenditure does not get disallowed under the Income Tax Act. Sec. 40A(3): Cash expenses made to a single person in a day if the amount exceeds Rs. 10,000/-. In the case of Cash Expenses for plying, hiring, or leasing goods carriages, the limit is Rs. 35,000/- per day. Exceptions to this section are provided in Rule 6DD. If an expense is made above limits, it will be disallowed. Sec 43(1): Expenditure for acquisition of any asset if exceeds Rs. 10,000 in a day to a single person. Such sum will not be included in actual cost and hence no depreciation can be claimed. Sec. 80D: No deduction in respect of Health insurance Premium if payment is made in cash. Sec. 80G: No Deduction in respect of donation to charitable trust if cash donation exceeds Rs. 2,000/- Sec 269SS: Loans or Deposits or transactions in an immovable property shall not be accepted in cash if the amount in the aggregate including the unpaid amount if any exceeds Rs. 20,000. If contravened 100% penalty as per Sec. 271D. Sec 269T: Loans or Deposits or transactions in an immovable property shall not be repaid in cash if the amount in aggregate along with interest exceeds Rs. 20,000. If contravened 100% penalty as per Sec. 271E. Sec 269ST: A Sum exceeding Rs. 2,00,000 shall not be accepted from a person in a single day or in respect of a single transaction or event. If contravened 100% penalty as per Sec. 271DA. Sec 194N: TDS @2% will be applicable on Cash Withdrawal exceeding Rs. 1 Crore. However if ITR is not filed for 3 preceding years, the limit comes down to Rs. 20 Lakhs for TDS @ 2% & TDS @ 5% is applicable if the amount exceeds Rs. 1 Crore. Sec 44AB(a): The threshold limit for the audit of Accounts increases to Rs. 10 Crore if cash transactions do not exceed 5%. If transactions exceed the limit, a person becomes liable for audit u/s 44AB. Presumptive Taxation: The limit for opting for presumptive taxation will increase from Rs. 2 Crore to Rs. 3 Crore for businesses & and from Rs. 50 Lakhs to Rs. 75 Lakhs for professionals if cash transactions do not exceed 5% from Assessment Year 2024-25. In conclusion, while cash transactions are not illegal in India, they are subject to stringent regulations and monitoring by the income tax authorities. To avoid legal issues, it is essential to stay informed about the latest rules, maintain proper records, and consider transitioning towards digital payment methods for more transparent and hassle-free financial transactions.

If you want to apply for a loan💸, such as a personal loan, home loan, or car loan, you may be required to submit your Income Tax Return (ITR) 📁 documents as part of the loan application process. Most banks and financial institutions require the last 2-3 years' ITR documents as proof of income for loan applications. Here's top 3 reason why lenders often request ITR documents: ❶ It helps lenders assess your income and repayment capacity ❷ It helps lenders see that you have a stable source of income ❸ It shows the lender that you are financially responsible person [JD Shah, JD Shah Associates, Best CA firm in Mumbai, Chartered Accountants near me, Top CA firms in Mumbai, Income Tax Filing Services in Borivali, GST Registration Consultant in Borivali, RERA Registration Services in Mumbai, IPO Services Consultant in Mumbai, Reliable CA for Tax Audit in Mumbai] . . . ☎️ Call: +91 022 28983664 🌐 Website: https://www.cajdshah.com/ #JDShah #CAJDShah #bestcainmumbai #CAinBorivali #savetax #instagramreel #accountingservices

The Central Board of Direct Taxes (CBDT) has introduced a new electronic form called Form 71 to help people correct errors in tax deduction at source (TDS). This change is part of the Income Tax Rules, 1962 and will come into effect on October 1, 2023 [JD Shah, JD Shah Associates, Best CA firm in Mumbai, Chartered Accountants near me, Top CA firms in Mumbai, Income Tax Filing Services in Borivali, GST Registration Consultant in Borivali, RERA Registration Services in Mumbai, IPO Services Consultant in Mumbai, Reliable CA for Tax Audit in Mumbai] . . . ☎️ Call: +91 022 28983664 🌐 Website: https://www.cajdshah.com/ #accountingservices #moneymanagement #GST #retirementplanning #retirement #finances #financialsuccess #JDShah

Common mistakes frequently observed in financial statements as per ICAI’s publications and reviews include: 1. Disclosure of Accounting Policies (AS 1) Inadequate disclosure of significant accounting policies, especially those governing primary operations. Policies merely state compliance with standards (e.g., “in accordance with AS”) without specific application methods. 2. Valuation of Inventories (AS 2) Incorrect valuation methods or non-disclosure of valuation methods used (e.g., FIFO, weighted average). Failure to recognize inventory write-downs due to obsolescence or market value declines. 3. Revenue Recognition (AS 9) Incorrect recognition timing, failing to align revenue with the period in which it was earned. Misclassification of revenue streams or failure to disclose significant judgments used in revenue recognition. 4. Accounting for Fixed Assets (AS 10) Misclassification of costs between capital and revenue expenditures. Non-disclosure of revaluation or impairment policies. 5. Related Party Disclosures (AS 18) Incomplete disclosure of related party transactions. Omitting material relationships or transactions that could influence decision-making. 6. Cash Flow Statements (AS 3) Misclassification of cash flows among operating, investing, and financing activities. Lack of reconciliation with cash and cash equivalents. Cash Flow 7. Employee Benefits (AS 15) Failure to recognize obligations for defined benefit plans. Inadequate disclosure of actuarial assumptions and obligations. 8. Earnings Per Share (AS 20) Incorrect calculation of diluted earnings per share. Omission of disclosures about calculation methodology. Tax accounting 9. Deferred Tax Accounting (AS 22) Errors in calculating deferred tax liabilities or assets, especially in temporary differences. Lack of disclosures regarding the basis of deferred tax asset recognition. 10. Segment Reporting (AS 17) Failure to disclose reportable segments based on business activities or geography. Misalignment between management’s internal reporting and disclosed segments. These errors impact the reliability and transparency of financial statements, necessitating strict adherence to standards and rigorous audits.

Auditing refers to the examination of financial transactions and records of an entity to ensure that the financial information provided reflects the entity’s economic position and operations. By conducting regular statutory audits, companies can proactively identify and address potential legal vulnerabilities, thereby minimizing legal exposure, reducing the likelihood of disputes, and maintaining a strong and ethical organizational culture. In an era where legal compliance is paramount, organizations must recognize the importance of regular statutory audits as an essential tool for protecting their interests and ensuring long-term success in a rapidly changing business environment. . . . ☎️ Call: +91 022 28983664 🌐 Website: https://cajdshah.com/ #GSTFilingExperts #LeaveItToUs #JDShahCA #Accounts #financegoal #SavingHabit #incometax #incometaxreturn #gst #JDShah