Limit on Cash Receipt

[sanjay misra]

Dear Sir.

We are company .What would be the income Tax ruling for the following.

1         we have receipt cash of Rs 100000/- on a single day from a single customers on account of sale bill due.

2 One of our customer has directly deposited cash Rs 100000 into our bank account on account of sale bill due for payment

Would there be any difficulty in assessment of income tax case.

Thanks

[Ramesh Das]

There would not be any foreseeable difficulty, as you have received and not "paid" cash.  However, you should obtain a confirmation of account from the customer to confirm the fact and put on record irrefutable third party evidence.

Regards

 

AI Summary

Cash receipt compliance: obtain customer confirmations to substantiate large cash receipts and mitigate potential income tax assessment issues. Receipt of cash from a single customer, either in hand or by direct bank deposit, is not inherently problematic for income tax assessment; the key requirement is documentary corroboration. Maintain a written confirmation of account from the customer as verifiable third party evidence to substantiate the sale and receipt and to mitigate scrutiny in assessment proceedings.