Budget 2017: Cash Restrictions

0
64

Cash restrictions in Budget 2017
Accepting the Special Investigation Team’s recommendation to reduce cash transactions, the following restrictions have been imposed:
Cash expenditure over Rs.10,000 to attract dis-allowance while computing taxable income.
Cost of fixed assets for allowance of depreciation and investment linked deduction, not to include cash expenditure exceeding Rs.10,000.
Donation exceeding Rs.2,000 in cash shall not be eligible for deduction.
The benefit of presumptive taxation at 6% as against 8% shall be available only if the turnover is realised through banking channels

No person shall receive an amount of Rs.3 lakh or more in cash—
(a) In aggregate from a person in a day;
(b) In respect of a single transaction; or
(c) In respect of transactions relating to one event or occasion from a person.

The last part of the restriction on cash transaction of Rs.3 lakh prohibits artificial splitting of one transaction into various parts, since it refers to the occasion in respect of which the payment is made. If one is making a payment of Rs.10 lakh to a banquet for a wedding; it may not be possible to split the transaction by taking four invoices of Rs.2.5 lakh each and paying cash, since the transaction is in respect to one occasion, i.e., wedding.

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here