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Cash payments over the limit, section 36(4)

For CAs preparing a tax audit or closing the books. Paste the cash book and see every person paid more than ₹10,000 in cash in a day, the amount disallowable, and the Form 26 clause 30 table ready to copy.

Free. No sign-up.Rules last reviewed 3 Oct 2026

Your cash book stays in your browser. Nothing is uploaded or stored.

One cash payment per row: date, party, amount, and the narration and ledger if you have them. A Tally Day Book export works too; only payments from the cash ledger are read. Dates are read day first.

Paste a cash book or try the sample

You will see each payment to one person in a day above ₹10,000, the amount disallowable under section 36(4) and the Form 26 clause 30 table.

Charter prepares the Form 26 workpapers from your Tally data.

Import the day book and trial balance. Charter fills clauses 30 and 31 and the other computable clauses, with the vouchers behind each row, for you to review.

Use this inside Charter

Signed-in users get this tool in the Tools area, with saved runs. This page stays free without an account.

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How this is worked out

  • Every row of a cash book is a cash payment. From a Tally Day Book, only payments out of a ledger named Cash, Cash in hand or Petty cash are read.
  • Payments are added up per payee per day. The payee is the party, else the ledger. A day's total above ₹10,000 (₹35,000 for goods carriages) is flagged, and the whole of it is disallowable.
  • Rows booked to a loan or bank ledger (by name) are left out: those are repayments and transfers, tested under other sections.
  • A rule 26 carve-out chosen on a row keeps the row in the table at nil disallowance. The terminal benefit carve-out holds only up to ₹50,000.
  • The free checker reads the first 100 cash payments. Amounts are worked out in paise, never rounded through decimals.

Questions CAs ask

What is the cash payment limit under section 36(4)?
An expense is not deductible when the payment, or the payments added together, to one person in a day exceed ₹10,000 and are not made through a specified banking or online mode. The limit is ₹35,000 for plying, hiring or leasing goods carriages (section 36(6)). Section 40A(3) of the 1961 Act is the earlier version.
Is only the amount over ₹10,000 disallowed?
No. Once the day's cash payments to the person pass the limit, the whole of them is disallowed, not only the excess. The checker shows the day's total and the amount disallowable on each row.
Which cash payments are exempt?
Rule 26 of the Income-tax Rules 2026 lists them: for example payments to banks and LIC, to the Government where legal tender is required, purchases of agricultural produce from the cultivator, and payees in a village or town with no bank. Pick the clause on the row and the checker takes it out of the disallowance.
What about a cash payment against an expense claimed in an earlier year?
Section 36(5) deems it income of the year of payment, and Form 26 reports it in clause 31. A cash book alone does not show which dues were brought forward, so this free checker reports clause 30 only. Charter's tax audit workpapers use the trial balance opening balances for clause 31.
Is my cash book uploaded anywhere?
No. The file is read and checked in your browser. Nothing is sent to Charter AI or stored, and the page works the same if you go offline after it loads.