Cash transactions remain common in Indian businesses, but accepting or making cash payments beyond prescribed limits can result in disallowance of expenses and heavy penalties. The Income-tax Act, 2025 came into force on 1 April 2026. Therefore, businesses should understand the new section numbers as well as the correct scope of each cash-transaction restriction. Refer to the Income-tax Act, 2025, as amended by the Finance Act, 2026 . The limits shown in the image provide a useful summary, but they must be understood carefully: Transaction Limit Correct interpretation Cash receipts ₹2,00,000 Applies per person per day, per single transaction and per event or occasion Business cash payments ₹10,000 Aggregate payment to one person in one day; primarily an expense-disallowance rule Cash loan accepted ₹20,000 Current amount plus ...
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