Accepting cash in business transactions – Know the limits

Hands giving & receiving money - United States Dollars (or USD) bills

Flowchart Representation:

  1. Start

  1. Identify the Type of Transaction
    → If cash received ≥ Rs 2,00,000Section 269ST Violated100% Penalty
    → If loan or deposit > Rs 20,000Section 269SS Violated100% Penalty
    → If loan repayment > Rs 20,000Section 269T Violated100% Penalty
    → If business expense > Rs 10,000 in cashSection 40A(3) DisallowanceHigher Taxable Income
    → If fixed asset purchase > Rs 10,000 in cashSection 43(1) ViolatedNo Depreciation
    → If donation > Rs 2,000 in cashSection 80G RuleNo Deduction Allowed

  1. Implement Best Practices
    → Encourage Digital Payments
    → Maintain Proper Records
    → Consult Professionals

  1. End

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