Author Posts

February 25, 2020 at 1:37 pm


Our dealer issue tax invoice (credit) to his buyer value of Rs. 98400/- (both are Gst Registered Regular Dealer) and collected the amount vide cash receipt for value of same amount Rs. 98400/- (in single receipt)

Is it correct procedure as per it act?. in the circumference of cash transaction restricted above Rs. 10000/-

We request you to kindly explain about cash transaction restriction in Income Tax Act.

Thanking you.


K. Sivaprakasam,

Panruti – 607 106.

Cell 93607 95152





February 25, 2020 at 5:17 pm

Dear Mr K Sivaprakasam

  1. There is no Provisions in the GST Act which restricts Cash Sale transactions.
  2. But in the Income tax Act as per section 40A(3) restricts the transactions more than Rs.10,000/- otherwise than by way of Cheque or Electronic transfer  or by way of Bank draft in a single day to a single person shall not be allowed as deduction.
  3. Hence based on above your dealer will not suffer as accepting cash for sale transactions but your buyer will suffer as per section 40A(3).

Thanking you,

M Saravanan

Income Tax and GST Practitioners



February 25, 2020 at 9:25 pm

Thank you sir,

K. Sivaprakasam,