1. Restrictions on Cash Payments
- Certain cash expenses above prescribed limits may be disallowed.
- Examples:
- Payments to a person in a day exceeding specified amount may attract disallowance.
2. Advantages of Digital Payments
- Better audit trail.
- Support for higher tax audit thresholds in some cases where cash receipts/payments are within limits.
3. Business Best Practices
- Encourage suppliers and staff to accept / use digital modes.
- Document unavoidable cash transactions carefully.
- Periodically review cash book for large or repetitive cash expenses.
