Cash Payment Rules Under Income Tax Act | Avoid Disallowed Business Expenses

Описание: Cash Payment Rules Under Income Tax Act | Avoid Disallowed Business Expenses

Learn about the disallowed business expenses under the Income Tax Act and understand what expenditures are not eligible for tax deductions. This video explains the various business expenses that are not allowed as deductions, helping you to accurately file your tax returns and avoid any potential penalties. By knowing what expenses are disallowed, you can ensure compliance with tax laws and optimize your business's financial performance. The Income Tax Act has specific provisions that outline the types of expenses that are not permissible, and this video provides clarity on these provisions, enabling you to make informed decisions about your business expenses and tax planning.
Most businessmen believe that if an expense is genuine, it will always be allowed.
But under the Income Tax Act, that’s not always true — especially when payments are made in cash.
In this video, we break down the cash payment prohibitions under the Income Tax Act and explain why genuine business expenses still get disallowed during assessment or audit.

🔍 What You’ll Learn in This Video
✔️ What are Income Tax Act prohibitions on cash payments
✔️ Why disallowed business expenses create tax notices
✔️ Understanding cash payment limits in India
✔️ Difference between genuine business expenses and allowable expenses
✔️ The ₹10,000 cash limit per day per person explained simply
✔️ When the ₹20,000 per day per person limit applies
✔️ How section-wise cash restrictions impact businesses
✔️ Common cash expense rejection mistakes
✔️ Audit risks related to unexplained cash transactions
✔️ How Income Tax rules affect businessmen’s daily operations
✔️ How to explain cash payments to tax officers correctly
✔️ Why tax-compliant business spending matters more than profit

🚪 Simple Analogy to Understand Cash Limits

Think of the ₹10,000 and ₹20,000 limits like a narrow doorway.
If your expense is small enough and properly explained, it passes through and becomes a valid tax deduction.
But if the payment is too large and made in cash, the Income Tax Act blocks it completely, no matter how genuine it looks.

⚠️ Why This Video Is Important for Business Owners
❌ Cash expenses above limits can be rejected entirely
❌ Disallowed expenses increase taxable profit artificially
❌ Unexplained cash creates audit red flags
❌ Repeated mistakes lead to Income Tax scrutiny

Switching to tax-compliant business spending methods like banking channels, cheques, or digital payments can save you from future notices and penalties.

👨‍💼 Who Should Watch This Video?
Business owners
Traders & shopkeepers
Professionals & consultants
Small & medium enterprises
Anyone dealing with cash expenses in business

👍 If you found this helpful:
✔️ Like the video
✔️ Share it with fellow businessmen
✔️ Subscribe for more Income Tax & compliance education

📌 Comment below if you’ve ever faced a cash expense rejection or Income Tax notice.

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