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CMA Intermediate · Direct and Indirect Taxation · PAN

Meera Textiles, a trader, receives cash as follows on one day: Rs. 1,20,000 from customer A for one sale and Rs. 85,000 from the same customer A for a second sale. It also receives Rs. 1,50,000 in cash from customer B. Under section 186 of the Income-tax Act, 2025 (receipt of Rs. 2,00,000 or more), which statement follows?

Only the receipts from customer A contravene section 186. The limit applies to the aggregate received from one person in a day, and A paid Rs. 2,05,000 in cash. Customer B's Rs. 1,50,000 is below the limit, and different persons are not added together.

  1. ANo contravention, as each single transaction is below Rs. 2,00,000
  2. BContravention for both customers, as total receipts exceed Rs. 2,00,000
  3. CContravention only for customer A, as aggregate from A in a day is Rs. 2,05,000Correct
  4. DContravention only for customer B, as it is the larger single sum

Explanation

Section 186(1)(a) covers Rs. 2,00,000 or more in aggregate from a person in a day. Customer A: 1,20,000 + 85,000 = 2,05,000, which breaches the limit. Customer B: 1,50,000 is below it. Totals across different persons are not combined.

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