Provisions of Rule 114E(2) provides that persons liable to tax audit should report transaction of cash sales of goods or services to Income-Tax Department in AIR. Such reporting requirement is there only when receipt of cash payment exceeds two lakh rupees. Doubts were raised whether all cash transactions would be aggregated to consider the aforesaid limit of Rs 2 lakhs.
The CBDT vide Press Release, dated 22-12-2016 has clarified that aforesaid cash transactions did not require aggregation.The reporting requirement in AIR is on receipt of cash payment exceeding Rs 2 lakh for sale of goods or services per transaction.
Editor’s comment:
Seller is required to report details of cash sales in AIR only when transaction value of such sales exceeds Rs 2 lakhs. Suppose, if any seller has made cash sales of 20 transactions at Rs 20 lakhs then he is not required to report such transactions if value of each transaction does not exceed Rs 2 lakhs.
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