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Chandra Prakash (Sr. Engr)     16 July 2013

Cash payment more than 20,000

Dear Sir, My wife says in 498A case filled u/s 200 that 65000 cash paid in reception which handed over to my mother. I heard that as per income tax rule, more than 20,000 is not allowed cash payment in one day. Above mention statement by my wife will violate income tax rule. Please confirm under which section of income tax, above statement will violate the rule.


 4 Replies

Ashok, Advocate (Lawyer at Delhi)     16 July 2013

Sub-section (3) of Section 40-A of the Income Tax Act, 1961, lays down as under:


“(3) Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure.”


However, this provision is basically applicable when you want to claim payment of an amount paid in cash as an expenditure towards your income from business or profession. This may not be relevant in the situation mentioned by you since I don’t think the amount paid in cash at the time of marriage reception would be claimed as expenditure while computing business by your wife (or her parents).



It is pertinent to point out that likewise Section 269-SS of the Income Tax puts certain restrictions of taking certain loans/deposits in cash if the amount is Rs. 20000/- or more.Similarly, Section 269-T of the Income Tax Act does not allow repayment of a loan by cash if the amount is Rs. 20000/- or more. However, these sections are also not relevant for your purposes.

Deepakraj G (Legal adviser)     17 July 2013

Sir, Thnx. But if in a case u/s 138 of N I Act,suppose the case is filed on the ground that complianant has given hand loan to accused above Rs. 20,000 and if the complainant did not make any entry in his assessment, then can the complainant be liable under Income Tax Act ? Pls clarify . Thnx

LAXMINARAYAN - Sr Advocate. ( solve problems in criminal cases. lawproblems@gmail.com)     17 July 2013

1) There is defference between cash gift , cash expanses and cash loan.


2) In case of cash loans section 271 D is applicable and so far cheque bounce cases.


However in your case, you can dispute the existance of cash, IT returns and witnesses .........

prakharved (Medical officer)     17 July 2013



How is the wife proving that 65000 had been paid?



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