TaxTMI 
TaxTMI 
Sir, various debtors have directly deposited cash in my current account from different location. what is the impact on me as a creditors and impact and violation on debtors.
Cash directly deposited into bank account by debtors-40A(3) applicable or not
16 Jul 2021 
2 Replies 
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Cash deposit compliance: creditor unaffected, but cash receipts by debtors may breach cash receipt prohibitions and reporting obligations.
The creditor is not impacted by debtors depositing cash directly into the creditor's bank account; legal risk lies with the payors. Cash receipts by debtors can violate statutory cash payment restrictions when daily cash receipts exceed the prescribed limit, and larger single instance cash receipts may invoke the prohibition on cash loans/repayments and corresponding information return and statement of financial transactions reporting obligations under the tax law. (AI Summary)
The creditor is not impacted by debtors depositing cash directly into the creditor's bank account; legal risk lies with the payors. Cash receipts by debtors can violate statutory cash payment restrictions when daily cash receipts exceed the prescribed limit, and larger single instance cash receipts may invoke the prohibition on cash loans/repayments and corresponding information return and statement of financial transactions reporting obligations under the tax law. (AI Summary)